ill  i  ill  l!  Ill 


ii'  ill  !l!|- 

ipil  i 


I 

iilll  ill     ill 


PPiiPPiplii  Hilil'i; 

^'jinijiJiiiiHspljiiiijIIJiFJilM'!^"^ 

"^4  phPiiSBte  !ii  i  iii : 
mmMmmmi  ^ 


iilfc^ 


ii;ii 


Hill 
ill! 


i 
hi;i 


"*'    '^    ^»      ■"         *  fla^e  starnped  helov 


tof 


COMMERCIAL  ARBITRATION 
AND  THE   LAW 


COMMERCIAL  ARBITRATION 
AND  THE  LAW 


BY 


JULIUS  HENRY  COHEN 

AUTHOR  OF  "WW  AND  ORDER  IN  IMDDSTRTf" 

"THE  law:    business  or  PROFESSION?" 
*A  LSAGCE  TO  EKIORCE  INDUSTRIAl  PEACB" 


D.  APPLETON  AND  COMPANY 
NEW  YORK  LONDON 

1918 


3  U  (w  ^i/  JL 


Copyright,  1918,  by 
D.  APPLETON  AND  COMPANY 


Printed  in  the  United  Stales  of  America 


DEDICATED 
TO 

CHARLES   L.   BERNHEIMER 

WHO,  AS  CHAIRMAN  OF  THE  COMMITTEE  ON  COMMERCIAL 
ARBITRATION  OF  THE  CHAMBER  OF  COMMERCE 

OF  THE  STATE  OF  NEW  YORK, 

HAS  DONE  MORE  THAN  ANY  OTHER  ONE  MAN  TO 

ENCOURAGE  AND  DEVELOP  THE  PRACTICAL 

USE  OF  COMMERCIAL  ARBITRATION 

IN  THE  UNITED  STATES 


INTRODUCTION 


1 
">) 

^  I 

The  Chamber  of  Commerce  of  the  State  of  New  York 
is,  I  believe,  the  oldest  commercial  or  trade  body  in  the 
United  States.    Its  charter  runs  back  to  the  days  of  George 
the  Third  (April  5th,  1768).     The  act  confirming  it  was 
one  of  the  first  pieces  of  legislation  passed  by  the  State 
^     of  New  York.*    Yet  almost  as  old  as  the  Chamber  itself  is 
N     its  interest  in  the  arbitration  of  commercial  disputes.     In 
.  'i^.  the  records  of  the  Chamber  are  to  be  found  interesting 
eases  disposed  of  by  arbitration  during  the  Revolutionary 
Period.     Just  prior  to   Comwallis'  surrender  and   at  a 
time  when  the  City  of  New  York  was  still  under  martial 
'r>       law,    Andrew    Elliot,     "Superintendent-General,"    writes 
oc)     (October  2nd,  1781) :   **As  I  was  and  still  am  of  opinion 
that  Mercantile  disputes  cannot  be  adjusted  in  a  more 
proper  or  more   equitable  way  than  by  a  reference   to 
respectable  Merchants,  it  gave  me  great  satisfaction  when 
the  method  was  so  generally  agreed  to,  and  I  flattered 
j    myself  that  notwithstanding  the  trouble  it  gave  individuals, 
V    that  it  would  at  least  continue  as  long  as  I  had  any  con- 
cern in  the  Superintendency,    I  shall  be  much  concerned 
if  these,  my  expectations,  should  be  disappointed."     He 
then  makes  the  following  painful  reference  to  the  then 
existing  condition :    * '  The  present  Juncture  of  Affairs  does 
not  seem  favorable  for  any  new  plans  to  be  adopted.    It 
has  long  been  proposed  ( I  hope  Events  are  not  distant  that 
may  admit  of  a  Trial)  to  revive  such  part  of  the  civil  Au- 
»  April  13tb,  1784,  Chap.  XXX,  Laws  of  1784. 

vii 


>■ 


viii  INTRODUCTION 

thority  by  which  justice  may  be  administered  to  the  Com- 
munity. Individuals  will  then  be  freed  from  the  Burthen 
of  adjusting  Mercantile  disputes,  and  I  shall  be  relieved 
from  a  most  fatiguing  anxious  situation,  but  I  beg  you  will 
assure  the  Chamber  of  Commerce  that  in  all  situations  I 
shall  ever  retain  the  highest  sense  of  Assistance  and  Sup- 
port they  have  afforded  me."^  From  1874  down  to  1895 
the  Chamber  housed  the  Court  of  Commerce  or  Court  of 
Arbitration  established  by  the  Legislature  of  the  State 
in  April,  1874.  Over  this  Court  the  late  Judge  Enoch  L. 
Fancher  presided.  Herein  partnership  cases,  claims  for 
salaries,  eases  arising  on  bills  of  lading,  on  shipments  of 
goods  from  abroad,  on  marine  insurance,  etc.,  etc.,  were 
submitted  to  the  arbitrator  and  satisfactorily  disposed  of. 
In  1911  a  special  Committee  on  Commercial  Arbitration^ 
recommended  the  plan  for  commercial  arbitration  which 
has  since  been  in  vogue.  This  plan  is  based  upon  the 
provisions  of  the  Code  of  Civil  Procedure  of  the  State  of 
New  York  pennitting  voluntary  submissions  to  arbitration 
and  provided  for  the  entry  of  a  judgment  upon  the  award 
and  the  enforcement  of  the  judgment  as  a  judgment  of  a 
court  of  record.  This  system,  to  my  personal  knowledge, 
has  worked  to  the  eminent  satisfaction  of  all  concerned. 
My  experience  is  in  accord  with  that  of  Sir  Albert  K. 
Rollit,  Ex-President  of  the  London  Chamber  of  Commerce 
and  Chairman  of  its  Arbitration  Committee,  who  said  on 
Feb.  19,  1909 : 

"Arbitration  is  indeed  the  natural  right  of  disputemts 
to  choose  their  own  tribunal,  and  is  the  practical  art  of 
vindicating  and  reconciling  disputants,  and  doing  so  at  a 
minimum  of  expenditure,  time  and  trouble. 

"Except  for  arbitration  there  would  be  many  cases  in 
which  justice  would  be  denied. 

•Bfpords  of  Chamber  of  Commorce,  October,  1781. 
*  JamcB  Talnott,  Henry  Hentz,  Frank  A.  Ferris,  Alexander  E.  Orr, 
Charles  L.  Bernhcimor,  Chairman. 


INTRODUCTION  ix 

**Ev6n  rough  and  ready  trade  arbitrations  are  necessary 
in  modern  commercial  life. 

"There  is  no  rivalry  in  arbitration  with  the  law  or  the 
administration  of  the  law." 

But  business  men  engaged  upon  this  side  of  the  ocean 
in  administering  arbitration  committees  have  found  it  dif- 
ficult to  understand  why,  as  matter  of  law,  existing  dis- 
putes could  be  submitted  to  arbitration,  yet  they  could 
not  in  advance  agree,  as  part  of  the  consideration  for  their 
entering  into  a  contract,  that,  in  the  event  of  controversy 
over  the  contract,  the  dispute  should  be  referred  to  their 
own  Exchange  or  Board  of  Trade  or  Chamber  of  Com- 
merce or  to  arbitrators  selected  by  them.  That  judges  as 
well  as  laymen  had  the  same  difficulty  appeared  when,  in 
1915,  Judge  Charles  M.  Hough,  one  of  our  ablest  Federal 
Judges,  in  TJ.  8.  Asphalt  Befining  Co.  v.  Trimdad  Lake 
Petroleum  Co.,*  stated  that  he  could  find  no  basis  in  reason 
for  the  existing  law ;  yet,  upon  old  precedent,  he  was  con- 
strained to  hold  that  a  clause  in  a  contract  by  which  the 
parties  solemnly  agreed  to  submit  their  differences,  if  any 
arose,  to  arbitration,  was  revocable  at  the  pleasure  of 
either.  At  about  the  time  of  the  rendition  of  this  decision, 
our  Committee  on  Commercial  Arbitration  was  considering 
the  wisdom  of  a.pplying  to  the  Legislature  for  relief  from 
what  we  regarded  and  still  regard  as  an  anomalous  condi- 
tion in  the  law.  In  the  summer  of  1915  we  asked  the  Con- 
stitutional Convention  then  sitting  in  Albany,  to  insert  in 
the  Judiciary  Article  the  following:  "The  legislature  is 
authorized  to  make  provision  for  submission  of  contro- 
versies, existing  or  non-existing,  to  arbitration,  and  to 
validate  agreements  made  by  the  parties  to  that  end."  We 
were  told  by  the  Chairman  of  the  Judiciary  Committee  of 
the  Constitutional  Convention  that  no  such  authority  was 
necessary.  On  the  other  hand  one  of  the  leading  legal 
authorities  in  this  country  on  August  19th,  1915,  wrote  us : 

«  222  Fed.  Rep.  1006. 


X  INTRODUCTION 

"But  I  cannot  say  that  I  am  yet  certain  that  the  long 
established  reluctance  of  the  courts  to  surrender  jurisdic- 
tion, should  be  set  aside." 

The  decision  of  Judge  Hough  came  to  the  attention  of 
the  London  Court  of  Arbitration  at  about  the  same  time. 
Shortly  after  its  rendition,  the  London  Court  called  our 
attention  to  the  fact  that,  if  the  judgment  of  Judge  Hough 
were  not  reversed  on  appeal  or  the  law  changed,  "a  Citizen 
of  the  United  States  of  America  would  be  in  the  position 
to  enforce  an  Award  in  his  favour  wherever  delivered 
against  a  British  subject,  whether  resident  in  England  or 
any  British  Colony  or  Dependency  .  .  .  whereas,  should 
the  Award  go  against  him,  he  could  ignore  it. ' '  That  such 
a  condition  could  exist  seemed  inexplicable  to  the  London 
merchants  (and  to  American  merchants  as  well),  who  re- 
ported that  ''Recourse  to  arbitration  in  this  Country 
(England),  is  very  general,  and  it  is  a  gratifying  tribute 
to  the  efficiency  with  which  justice  is  administered  in  the 
London  Court  of  Arbitration,  that  Foreign  Merchants 
readily  assent  to  the  insertion  in  their  contracts  of  a  clause 
providing  for  the  reference  of  differences  thereto." 

Mr.  Justice  Vernon  M.  Davis,  in  administering  the  oath 
to  our  committee  on  the  1st  of  June,  1911,  had  said: 
"...  it  is  the  policy  of  the  law  to  encourage  arbitration." 
And  another  well-known  jurist  in  our  community,  Ex- 
Justice  Francis  jM.  Scott,  had  said  that  there  was  no  dif- 
ference between  "the  promise  to  forbear  to  prosecute  a 
particular  claim  upon  which  one  has  a  right  to  sue"  and  a 
promise  to  forbear  to  pursue  their  remedy  by  action  in 
the  courts  of  the  State.  "The  cause  of  action  to  enforce 
the  judgment  was  the  plaintiffs'.  They  could  do  with  it 
as  they  saw  fit  to  the  extent  of  releasing  it  wholly  on  the 
one  hand,  or  of  prosecuting  every  legal  method  for  its 
collection  on  the  other.  WJiatever  course  they  saw  fit  to 
adopt  was  no  matter  of  public  concern,  and  affects  no  ques- 


INTRODUCTION  xi 

tion  of  pullic  policy,  and  if  they  saw  fit  to  make  an  agree- 
mentf  otherwise  valid,  that  they  ivould  forhear  to  pursue 
their  remedy  hy  action  in  the  courts  of  this  state,  there  is 
no  public  policy  which  renders  that  agreement  invalid.''^ 

We  found  ourselves  quite  in  agreement  with  our  friends 
in  London,  who  wrote  us  that  ' '  The  argument  that  a  party 
to  a  contract  between  nationals  of  different  states  may  not 
substitute  an  independent  Arbitral  Tribunal  for  a  Court 
of  Law,  should  surely  be  regarded  in  the  twentieth  cen- 
tury as  obsolete." 

We  were  convinced  that  something  should  be  done  to 
harmonize  the  law  of  the  United  States  with  the  law  of 
England.  Our  Committee  had  had  long  and  earnest  coun- 
sel with  its  legal  adviser  upon  this  subject,  and  gave  con- 
sideration to  a  plan  for  securing  relief  from  the  Legis- 
lature of  the  State  of  New  York.  In  1916,  however,  Mr. 
Clarence  M.  Lewis,  a  member  of  the  New  York  Bar,  in 
the  case  of  Spiritusfabriek  Astra,  of  Amsterdam,  Holland 
V.  Sugar  Products  Company,  took  issue,  on  behalf  of  his 
client,  with  this  hoary  doctrine  in  the  law,  and  with  a 
view  to  securing  its  judicial  reconsideration  appealed  to 
the  New  York  Chamber  of  Commerce  to  intervene  as  a 
friend  of  the  Court  and  to  j)resent  the  business  man's 
point  of  view.  His  appeal  to  the  Chamber  did  not  go 
unanswered.  Mr.  Julius  Henry  Cohen  was  requested  to 
represent  the  Chamber  in  the  case  referred  to.  I  will  leave 
Mr.  Cohen  to  tell  the  rest  of  the  story.  Suffice  it  to  say 
that  the  results  of  his  research  appealed  so  strongly  to 
our  Committee  that  we  determined  not  to  wait  for  the 
submission  of  a  brief  to  be  used  only  in  Mr.  Lewis'  case, 
but  to  print  the  results  for  the  use  of  the  Bar,  the  judiciary, 
and  the  laity  throughout  the  country  and  elsewhere.  We 
were  convinced  that  a  careful  presentation  of  the  history 
of  the  doctrine,  its  original  error,  its  repetition  in  ignor- 
ance, and  its  final  overthrow  by  the  English  courts,  must 

8  Gitler  v.  Rmsian  Co.,  124  App.  Div.,  273,  at  p.  276.    Italics  ours. 


xii  INTRODUCTION 

result  ultimately  in  the  rectification  of  the  American  error 
by  our  gwti  courts.  If,  as  we  believe,  the  policy  of  the  law 
is  favorable  to  commercial  ai'bitration,  the  courts  will 
surely  not  hesitate  to  set  the  law  right  upon  discovery  of 
their  error. 

Charles  L.  Bernheimer, 
Chairman,  Committee  mi  Arbitration,  Chamber  of  Com- 
merce of  the  State  of  New  York. 

New  York. 


II 


In  one  of  the  wings  of  the  Metropolitan  IMuseum  of  Art 
they  have  re-erected  "Perneb's  Tomb."  Forty-five  hun- 
dred years  ago  an  Egyptian  of  importance,  by  the  name 
of  Perneb,  a  very  confidential  adviser  to  the  king  at  Mem- 
phis, built  this  wonderful  mausoleum.  To  bring  it  to  New 
York  required  that  it  be  dug  from  under  the  great  mound 
of  debris  heaped  upon  it.  The  various  blocks  had  to  be 
taken  down,  carefully  separated,  and  shipped  to  this  coun- 
try. Then  they  had  to  be  put  together  again  and  the  en- 
tire tomb  re-erected  as  it  now  stands  in  the  large  gallery 
at  the  northern  end  of  the  Fifth  Avenue  hall.  In  describ- 
ing the  details  of  the  work  of  taking  down  the  struc- 
ture, Albert  M.  Lythgoe,  who  had  charge  of  the  work,  re- 
fers to  the  rare  opportunity  which  he  thus  had  of  seeing 
in  reverse  order  the  various  details  of  the  erection  of 
the  tomb.  Thus,  for  example,  he  found  upon  many  of 
the  backs  of  the  blocks  original  "mason's  marks"  writ- 
ten in  red  ochre,  while  a  great  patch  of  the  paint  itself 
he  found  in  the  saiid  just  north  of  the  tomb,  where  it 
had  been  thrown.  On  the  backs  of  the  walls  he  found 
places  where  the  mortar  still  bore  "the  hardened  im- 
prints of  the  fingers  of  the  workmen  as  distinctly  as  on 


INTRODUCTION  xiu 

the  day  when  the  blocks  had  been  placed  in  position," 
while  under  the  remains  of  the  plaster  and  mud  flooring 
of  the  offering  chamber  there  were  still  to  be  found  "the 
scattered  shells. of  a  number  of  nuts  which  some  work- 
man had  had  for  his  luncheon  on  the  day  he  was  laying 
the  floor." 

About  a  year  ago,  when  I  stood  inside  the  tomb  and 
read  this  paragraph  by  Lythgoe,  I  found  myself  envy- 
ing the  opportunities  that  he  and  his  associates  had  had. 
The  joy  of  going  over  this  work  "in  reverse  order"  through 
"all  the  various  details  of  its  erection,"  at  the  same  time 
feeling  human  touch  with  men  who,  4500  years  before 
had  put  the  building  together,  was  a  rare  human  experi- 
ence. 

The  memory  of  this  visit  to  Pemeb's  tomb  came  back 
to  me  when  I  began  the  task  of  digging  under  the  mound 
of  debris  covering  the  ancient  doctrine  I  was  charged 
by  the  New  York  Chamber  of  Commerce  to  examine  and 
study.  As  the  process  of  taking  down  the  structure  of 
this  ancient  tomb,  brick  by  brick,  went  on,  I  became  more 
and  more  interested  in  discovering  upon  the  backs  of  the 
walls  "the  hardened  imprints  of  the  fingers  of  the  work- 
men" and  "the  scattered  shells"  of  the  nuts  which  they 
ate  for  luncheon.  For  example,  the  discovery  that  the 
notorious  Baron  Jeffreys  had  enunciated  a  doctrine  more 
equitably  sound  than  that  firmly  imbedded  by  my  Lord 
Coke  in  the  brick  and  mortar  of  the  English  Common 
Law  made  me  nearly  drop  my  pick  and  shout.  In  brief, 
the  process  of  reviewing  in  "reverse  order"  the  ways  of 
thinking  of  Coke  and  Jeffreys  and  later  Eldon  and  Bram- 
well  and  Cranworth  and  Campbell  gave  me  a  time  of  en- 
joyment comparable  somewhat  with  the  pleasures  of  the 
Museum  staff  when  tearing  down  and  reconstructing  Per- 
neb's  tomb.  I  think,  too,  I  found  the  shells  of  some  of 
the  nuts. 

"When  I  first  began  the  work,  I  had  no  other  purpose 


xiv  INTRODTTCTION 

than  to  present  adequately  to  the  Court  all  the  phases  of 
public  policy  bearing  upon  the  question.  To  do  this,  it 
seemed  to  me  appropriate  to  ascertain  the  true  reason  for 
the  development  of  the  rule.  This,  obviously,  required  the 
application  of  the  historical  method.  I  confess  that  I  was 
surprised  to  discover  what  I  believe  now  to  be  the  fact, 
that  grave  judicial  error  had  been  committed  and  re- 
peated for  over  three  centuries  solely  through  failure  to 
secure  and  present  a  complete  historical  analysis  of  the 
evolution  of  the  Law  upon  this  subject. 

I  agree  with  my  friend,  Everett  V.  Abbot  ®  that  judicial 
errors  should  be  corrected  by  the  judiciary  and  that  this 
method  "is  obviously  the  wisest,  the  most  effective  and  the 
most  just."  As  he  says:  "The  mere  fact  that  there  has 
been  error  signifies  that  there  has  been  injustice  and  the 
courts  are  better  fitted  to  cope  with  injustice  than  any 
other  department  of  an  organized  state. ' '  I  agree  with  him 
that  the  courts  "should  always  be  ready,  therefore,  to 
apply  to  their  own  errors  and  injustices  the  judicial  method 
of  correction"  and  that  a  frank  acknowledgment  of  this 
kind  "and  an  open-minded  reception  of  lawyer-like  and 
respectful  arguments  tending  to  point  out  errors"  will, 
instead  of  undermining  their  authority  or  diminishing  the 
respect  in  which  they  are  held,  on  the  contrary  "the  more 
tolerant  and  approachable  the  Court  is,  the  greater  will 
be  the  popular  confidence  in  its  decisions."  I  think  he  is 
perfectly  sound  in  saying  that  "the  strongest  bulwark 
which  the  courts  can  erect  against  the  recall  and  other 
insidious  attacks  upon  our  judicial  system  will  be  found  in 
the  recognized  practice  by  the  courts  themselves  of  the 
principle  that  judicial  errors  are  to  be  judicially  cor- 
rected." 

My  experience  in  this  particular  piece  of  work  also 
confirms  my  friend  in  another  statement  made  by  him  in 

*Yale  Law  Journal,  Vol.  26,  No.  2,  p.  104  (Dec,  1916). 


INTRODUCTION  xv 

another  place. '  *  *  The  existence  of  an  erroneous  doctrine 
in  the  law  means  that  some  lawyer  has  been  inadequate  to 
his  duty.  Such  a  doctrine  cannot  come  into  being  ex- 
cept through  a  misunderstanding  of  principles  and  an  ac- 
ceptance of  insufficient  reasons.  At  some  point  in  our 
legal  history,  therefore,  attorneys  have  not  been  competent 
to  protect  their  clients,  or  judges  have  rendered  judgment 
upon  insufficient  knowledge."  I  should  modify  his  state- 
ment only  in  this  respect,  that  attorneys  have  been  com- 
petent enough,  but  did  not  apply  sufficient  diligence  to 
their  work.  It  is  a  fine  call  to  the  American  Bar  that  Ab- 
bot makes:  "We,  who  inherit  a  detailed  body  of  juris- 
prudence, are  not  adequate  to  our  duty,  either  as  practicing 
attorneys  or  as  members  of  the  judiciary,  if  we  fail  to 
correct  these  errors." 

As  I  have  pointed  out  later  on,  the  modem  courts  are 
increasingly  ready  to  correct  judicial  error  if  the  Bar  but 
make  adequate  presentation  of  the  error. 

Of  course,  a  study  like  the  one  embraced  in  the  suc- 
ceeding chapters  cannot  be  made  within  the  limit  and 
scope  of  the  ordmary  brief.  Indeed,  the  form  of  the  or- 
dinary brief  does  not  permit  of  such  a  presentation.  More- 
over, appellate  courts  are  not  receptive  to  treatises  or  legal 
essays  garbed  in  the  form  of  a  lawyer's  "Brief."  Perhaps 
it  is  right  that  this  should  be  so.  The  careful,  painstaking 
analysis  of  legal  authority  and  legal  principle  must  be 
done  when  the  telephone  bell  is  not  ringing  and  the  calen- 
dar is  not  too  crowded.  There  must  be  time  for  reflec- 
tion and  criticism.  Quite  apart  from  these  considerations, 
mere  argument  in  one  case  or  in  one  State  would  hardly 
serve  to  correct  the  existing  viewpoint  of  both  Bench  and 
Bar.  Furthermore,  whatever  information  is  secured  for 
use  in  the  courts  of  New  York  State  should  be  made 
available  to  the  lawyers  of  the  entire  country.  It  is  these 
considerations  that  led  to  the  publication  of  this  work. 

' ' '  Justice  and  the  Modern  Law, ' '  p.  79. 


xvJ  INTRODUCTION 

Busy  lawyers,  alas,  rarely  get  time  from  active  practice 
for  such  an  interesting  study  as  this  one  has  proved  to  be 
the  ragged  edges  in  this  work  are  due  to  the  interruptions 
that  oome  inevitably  when  one  is  engaged  in  the  active 
daily  practice  of  the  law. 

I  should  be  most  ungrateful  if  I  left  the  introduction 
without  making  simple  acknowledgment  to  those  who  have 
helped  me.  First  of  all,  to  Mr.  Lewis,  whose  ease  fur- 
nished the  occasion  for  the  investigation,  and  who  not  only 
graciously  turned  over  to  me  all  the  material  he  had  gath- 
ered together,  but  who  has  been  of  invaluable  assistance  in 
checking  up  and  running  down  modern  authorities  as  well 
as  in  correcting  the  proof.  The  librarians  at  the  Economics 
Division  of  the  New  York  Public  Library  and  at  the  As- 
sociation of  the  Bar,  especially  Miss  Adelaide  R.  Ilasse,  Mr, 
Franklin  O.  Poole  and  Mr.  A.  S.  McDaniel,  have  been  of 
great  help.  I\Iy  former  assistant,  Mr.  Frank  deR.  Storey, 
was  of  invaluable  aid  to  me  in  the  searching  through  of 
old  Year  Books  and  the  still  older  authorities,  with  his  rare 
linguistic  ability  translating  from  the  hard  "common  law 
French"  into  English,  and  helping  me  in  many  other  ways. 
I  regret  exceedingly  that  he  was  called  to  other  work  before 
I  could  complete  the  manuscript.  I  am  indebted,  too,  to 
Miss  Winifred  Notman,"  whose  splendid  legal  attainments 
enabled  her  to  save  me  from  error  in  the  manuscript,  al- 
though she  was  unable,  because  of  her  acceptance  of  a  call 
to  war  service  in  France,  to  complete  her  work.  With- 
out the  assistance  of  my  secretary.  Miss  Anna  B.  Deringer, 
it  would  have  been  impossible  for  me  to  have  gotten  out 
the  book  within  the  limitations  of  time. 

Of  course,  it  would  have  been  impracticable  for  a  prac- 
ticing lawyer  to  have  done  this  work  if  men  of  scholarly 
attainment,  like  Maitland  and  Pollock  and  Ames  and  Pound 
and  tlie  (jthcrs  to  whom  reference  is  freely  made  through- 
out the  book,  had  not  put  their  valuable  contributions  at 
the  disposal  of  all  legal  students.     In  this  connection,  in 

•(Now  Mra.  Duvid  Chandler  Price.) 


INTRODUCTION  xvii 

view  of  tlie  greater  place  women  are  coming  to  occupy 
in  the  affairs  of  the  world,  I  like  especially  to  mention 
the  splendid  contribution  of  Margaret  Klingelsmith  in  her 
translation  of  Stathara  's  ' '  Abridgement ' ' — a  most  scholarly 
contribution  to  the  science  of  the  law. 

Julius  Henry  Cohen. 


CONTENTS 

PART  I 
Public  Policy 

CHAPTER  PAGE 

I.   Business  Men's  Tribunals  and  the  Law  ...  1  ^. 

II.    The  Prevention  of  Unnecessary  Litigation  .     .  '  10 

III.  Public  Policy  and  Commercial  Arbitration  .     .  24 

IV.  The  Judicial  Rule  of  Stare  Decisis    ....  39 

PART  II 

The  Doctrine  of  Revocabilitt — A  Judicial  Error  53 

V.   Analysis  of  the  English  Authorities  ....  53 
VI.    The  Slow  Emergence  of  Legal  Concepts  of 

Contractual  Obligations 60 

VII.   The  Conflict  between  the  Law  Merchant  and 

THE  Common  Law 71 

VIII.   Coke's  Dictum  in  Vynior's  Case 84 

IX.   The  Earlier  Precedents  Contra  to  Coke's  Dic- 
tum         103 

X.   The  Effect  of  Coke's  Dictum 128 

XI.   Wherein  Lord  Coke's  Dictum  is  not  Followed  142 

XII.   The  Passing  of  Fines  and  Penalties    ....  148 

XIII.  "Ousting  THE  Courts  OF  Jurisdiction"     .     .     .  153 

XIV.  The  Error  is  Corrected:  Scott  v.  Avery,  1855  170 
XV.   The  True  Interpretation  of  Scott  v.  Avery 

(1855-94) 180 

XVI.   The  Judicial  Correction  of  a  Judicial  Error 

(England,  1853-1916) 205 

XVII.    How  English  Error  Worked  into  American  Law  226 

XVIII,   The  Development  in  the  Federal  (U.  S.)  Courts  242 

xix 


'^x  CONTENTS 

PART  III 
The  Sounder  Doctrine 

CHAPTEai  PAGE 

XIX.   The  Court's  Jealousy  of  its  own  Jurisdiction  253 
XX.   The  Ordinary  Understanding  of  an  Arbitra- 
tion Clause 265 

XXI.   Conclusion 279 

APPENDIX 

A.  Rules  for  the  Prevention  of  Unnecessary  Liti- 

gation (Report  of  Joint  Committee  of  Cham- 
ber OF  Commerce  of  the  State  of  New  York 
and  of  the  New  York  State  Bar  Association)    283 

B.  Rules  and  Regulations  of  the  Chamber  of  Com- 

merce OF  THE  State  of  New  York  for  Sub- 
missions TO  Arbitration 288 

C.  Illinois  Law  of  Arbitration 294 

D.  Form  of  Arbitration  Agreement  Adopted  by 

THE  Public  Service  Commission  for  the  First 
District  of  the  State  of  New  York  with  the 
Interborough  Rapid  Transit  Company  of 
New  York 298 

E.  ARBiTRii-TioN  Provisions  of  United  States  Ship- 

ping Board  Charter-Bare  Boat  Form   .     .     .     303 

F.  Rules  of  the  Municipal  Court  of  Chicago  Gov- 

erning Arbitration 301 

G.  Form  of  Subivussion  to  Arbitration  used  in  the 

Municipal  Court  of  Chicago 302 

H.'  List  of  Organizations  in  Chicago  agreeing  to 

Promote  Trade  Arbitrations       .....     30S 
I.   Rules  for  Arbitration  now  in  Operation  in 
the  Municipal  Court  op  the  City  op  New 
York 30« 


COMMERCIAL  ARBITRATION 
AND  THE  LAW 

PAET  ONE—PUBLIC  POLICE 

CHAPTER  I 

BUSINESS  MEN'S  TEIBUNALS  AND  THE  LAW 

In  two  trenchant  articles  written  by  a  former  judge, 
now  counsel  to  the  Public  Service  Commission  for  the  First 
District  of  New  York  State,^  based  upon  a  comparative 
study  of  the  disposition  of  questions  of  fact  by  quasi-judi- 
cial bodies  like  the  Public  Service  Commission  and  the 
disposition  of  such  questions  by  existing  judicial  methods 
in  the  courts,  the  writer  says  that  ^  ' '  Business  men  have  no 
great  quarrel,  as  a  rule,  with  the  legal  concepts  which 
the  common  law,  as  modified  by  statute,  would  apply  to 
the  arbitrament  of  their  business  dealings ;  they  wish,  and 
need,  certainty  and  equality  as  the  underlying  bases  of 
their  activities;  they  wish,  and  need,  to  know  that  when 
they  do  a  certain  thing  in  a  certain  way  or  enter  into 
an  agreement  in  a  certain  form,  their  rights  and  liabilities 
will  be  so-and-so,  definable  and  ascertainable  in  advance." 
"But,"  on  the  other  hand,  says  Judge  Ransom,  "for  the 
court  as  a  mechanism  for  promptly,  acceptably  applying 
that  acceptable  standard,  the  business  man  has  today  an 

*  *  *  The  Organization  of  the  Courts  for  Better  Administration  of 
Justice,"  by  William  L.  Ransom,  2  "Cornell  Law  Quarterly,"  pp. 
186  and  261. 

'Pp.  264-265. 


«  COMMERCIAL  ARBITRATION 

instinctive  distrust  and  dislike ;  legal  procedure  is  too  com- 
plicated, technical,  indirect,  dilatory,  wasteful  of  his  time 
and  everyone  else's,  to  warrant  him  in  taking  any  avoid- 
able chances  with  the  judicial  mill."  ^  What  business  men 
\want,  says  the  author,  "is  a  speedy  determination  of 
the  facts,  and  then  a  prompt  detei'mination  of  their  rights 
under  the  facts  as  found  and  the  applicable  rules  of  law, 
as  commonly  observed  in  the  community  for  the  conduct 
of  similar  business  dealings. ' '  *  An  English  writer,  review- 
ing the  development  of  English  legal  institutions,'*  says: 
"Owing  to  the  exigencies  of  trade,  merchants,  of  all  men, 
require  that  the  law  should  be  known  with  precision. ' '  ^ 
*  *  For  eight  hundred  years  merchants  have  cried  for  speedy 
justice.  Mercantile  men  must  be  about  their  business,  for 
trade  will  not  wait.  Once,  the  merchant  was  here  today 
and  gone  tomorrow ;  now,  he  will  sooner  cut  his  loss  than 
have  his  case  hung  up  indefinitely;  if  he  cannot  get  king's 
justice  he  will  go  to  arbitration."'^  Ex-Senator  Root,  in 
an  address  entitled,  "The  Layman's  Criticism  of  the 
Lawyer,"  made  before  the  American  Bar  Association  at 
its  meeting  in  Washington  in  1914,  said: 

"American  procedure  ought  to  follow  as  closely  as  pos- 
sible the  methods  of  thought  and  action  of  American  farm- 
ers and  business  men  and  workmen.  The  law  is  made 
not  for  lawyers  but  for  their  clients,  and  it  ought  to  be 
administered,  so  far  as  possible,  along  the  lines  of  laymen's 
understanding  and  mental  processes.  The  best  practice 
comes  the  nearest  to  what  happens  when  two  men  agree 
to  take  a  neighbor's  decision  in  a  dispute,  and  go  to  him 
and  tell  their  stories  and  accept  his  judgment.  Of  course 
all  practice  cannot  be  as  simple  as  that;  but  that  is  the 
standard  to  which  we  ought  to  try  to  conform  rather  than 

'"Cornell  Law  Quarterly,"  p.  265. 

*Ibid.,  p.  273. 

•"A  History  of  English  Legal  Institutions,"  by  A.  T.  Carter. 

•Ibid.,  p.  265. 

'Ibid.,  p.  269. 


BUSINESS  MEN'S  TRIBUNALS  » 

the  methods  of  an  acute,  subtle,  logical,  finely  discrimina- 
ting, highly  trained  mind.  It  is  that  sort  of  thing  which 
merchants  seek  when  they  get  up  committees  of  arbitration 
to  decide  their  controversies  without  the  intervention  of 
lawyers.  They  are  trying  to  get  their  questions  settled 
in  accordance  with  their  instincts  and  habits  of  thought. 
That  is  the  way  in  which  all  the  great  international  arbi- 
trations are  conducted.  Fortunately  for  them,  the  judicial 
procedures  of  the  nations  differ  so  widely  that  there  can- 
not be  any  particular  rules  of  practice  in  an  international 
case.  Accordingly  each  country  tells  its  story  in  print 
and  then  both  go  in  and  tell  the  arbitrators  about  it.  Many 
of  these  cases  are  exceedingly  complicated  and  difficult  but 
they  require  no  complicated  and  difficult  procedure. ' '  * 
"For  contracts  and  injuries  done  concerning  the  fair  or 
market,"  says  Coke,®  "there  shall  be  as  speedy  justice  done 
for  the  advancement  of  trade  and  traffic  as  the  dust  can 
fall  from  the  foot,  the  proceedings  there  being  'de  hora 
in  horam.'  "  "The  Carta  Mercaioria  of  the  reign  of  Ed- 
ward I  granted  as  a  favour  to  foreign  merchants  that 
'every  contract  between  said  merchants  and  any  persons, 
whensoever  they  may  come,  touching  any  kind  of  mer- 
chandise, shall  be  firm  and  stable,  so  that  neither  of  the  said 
merchants  shall  be  able  to  retract  or  resile  from  the  said 
contract  when  once  the  God 's  penny  shall  have  been  given 
and  received  between  the  parties  to  the  contract'";" 
and  similar  words  were  found  in  the  Custom  of  Avignon.^^ 
In  this  charter  we  find  the  words:  "Item,  volumus  et  con- 
cedimus,  quod  aliquis  cerius  homo  fidelis  et  discretes' 
London,  residens  assignetur  Justiciarius  Mercatorihus 
memoratis,  coram  quo  valeant  specialiter  placitare  et  debita 

•Report  of  American  Bar  Association,  Vol.  39,  p.  397. 

•4  Institutes,  272,  quoted  in  Smith's  "Mercantile  Law,"  Vol.  I, 
Introduction,  Ixxii. 

*"  Smith 's  ' '  Mercantile  Law, ' '  Vol.  I,  Introduction,  Irxiv. 

"Maitland'a  "Select  Pleas  in  Manorial  Courts,"  p.  133  (Selden 
Society). 


4  COMIVIERCIAL  ARBITRATION 

sua  recuperare  cderiter,  si  vicecomiies  et  majores  eis  non 
facereni  de  die  in  diem  celeris  justicice  complementum;  et 
ind^  fiat  conimissio  extra  cartani  presentem  concessa  mer- 
caforihU'S  antedictis,  scilicet  de  Mis  qucB  sunt  inter  mer- 
catores  et  mercatores,  secundum  legem  mercatorium, 
deduce'tida."  ^-  Sir  Leoline  Jenkyns  says:  "Nothing  can 
be  more  pernicious  to  seafaring  and  trading  men  than  de- 
lays in  their  lawsuits,  and  therefore  every  maritime  country 
in  Christendom  has  a  separate  judicature  for  differences 
among  merchants  and  seafaring  men.  .  .  . "  "  The  institu- 
tion known  as  the  "Gild  Merchant"  was  an  association  for 
the  purpose,  among  others,  of  mutual  arbitration.  Carter 
tells  us:^*  "Members  of  the  same  gild  were  "bound  to 
bring  their  disputes  before  the  gild  before  litigating  the 
matter  elsewhere."  He  tells  us  that  this  function  of  the 
gild  merchant  was  "recognized  by  the  kings."  The 
great  Gild  of  St.  John  of  Beverley  of  the  Hans  House 
held  charters  from  the  Archbishop  of  York,  with  the 
royal  license  of  Henry  I,  granting  to  the  town  and  bur- 
gesses a  gild  merchant  and  the  right  of  holding  pleas 
among  themselves,  and  that  this  grant  was  confirmed 
by  an  inspeximu^  charter  of  Richard  II  in  1379.  The 
City  of  York  has  a  charter  of  John,  dated  1200,  giving 
a  gild  merchant  the  liberties  pertinent  ;^^  and  in  1581  the 
Queen  allowed  the  merchants  there  to  elect  a  governor 

"Smith's  "Mercantile  Law,"  Vol.  I,  Introduction,  Ixxiv,  Ixxv, 
quoting  Prynne's  "Animadversions,"  p.  23. 

{Item,  We  ordain  and  grant  that  some  certain  loyal  and  discreet 
man  residing  in  London  ghall  bo  appointed  judge  from  among  the 
well-kHown  merchants,  before  whom  it  shall  be  lawful  specially  to 
plead  and  quickly  to  recover  their  debts,  if  the  sheriffs  and  elders 
shall  not  do  for  thcin  a  complete  measure  of  quick  justice  from  day 
to  day;  and  to  that  end,  let  a  commission  under  the  present  charter 
be  granted  to  the  aforesaid  merchants,  to  wit,  a  charter  for  deciding 
those  questions  which  arise  between  merchants  and  merchants,  accord- 
ing to  the  law  merchant. ) 

""Life  of  Sir  L.  Jenkyns,"  Vol.  I,  Ixxii,  (Smith,  Vol.  I,  Intro- 
duction, Ixivi.) 

^  ' '  History  of  English  Legal  Institutions, ' '  p.  268. 

"aroM:    "The  Gild  Merchant,"  Vol.  II,  p.  27». 


BUSINESS  MEN'S  TRIBUNALS  5 

and  eighteen  assistants,  with  power,  inter  alia,  to  try  all 
suits  among  its  members  or  between  the  latter  and  others." 
"In  a  charter  to  the  city  of  London  (52  Hen.  Ill)  it  is 
granted  to  the  citizens  not  to  plead  without  the  walls, 
except  (inter  alia)  to  pleas  concerning  merchandise,  which 
are  wont  to  be  decided  by  Law  Merchant  in  the  boroughs 
and  fairs  by  four  or  five  of  the  citizens  there  present. ' ' " 
In  1647  there  was  established  in  the  Town  of  New 
Amsterdam,  afterward  New  York,  a  court  of  arbitrators 
which  was  called  "The  Board  of  Nine  Men,"  under  an 
ordinance  that  provided  for  the  appointment  of  nine  arbi- 
trators who  should  serve  in  rotation,  three  at  a  time,  one 
arbitrator  being  a  merchant,  one  a  burgher,  and  one  a 
farmer.  The  ordinance  contained  the  following:  "whereas 
in  consequence  of  the  increase  of  the  Inhabitants,  Lawsuits 
and  disputes  which  parties  bring  against  each  other,  are 
multiplied,  and  also  divers  questions  and  quarrels  of  tri- 
fling moment,  which  can  be  determined  and  disposed  of  by 
Arbitrators,  but,  in  consequence  of  matters  of  greater 
importance,  frequently  remain  over  and  undecided,  to  the 
prejudice  and  injury  of  this  place  and  the  good  people 
thereof,  and  also  to  the  great  expence,  loss  of  time  and 
vexation  of  the  contending  parties  .  .  .,"  three  out  of 
those  chosen  as  arbitrators  are  required  to  attend  "once  a 
week,  on  Thursday,  the  usual  Burgher  Court  Day  to  our 
General  Council,"  and  further  provided  that  "parties  re- 
ferred, being  judged  shall  remain  bound  to  submit  without 
opposition  to  the  pronounced  decision  "  ^*  of  the  arbitrators. 
This  board  of  arbitrators  continued  untU  1653,  the  time 
when  a  municipal  form  of  government  was  granted  to  New 
Amsterdam,  and  there  was  then  created  the  Court  of 
Burgomasters  and  Schepens.    The  citizens  of  New  Amster- 

^Ibid.,  Vol.  II,  p.  280. 

"  Carter,  p.   268,  note  4,  citing  Norton,  Comm.  416. 
"Edgar  J.   Lauer:      "The   New  Practice   and   Procedure  in   the 
Municipal  Court  of  The  City  of  New  York,"  p.  5  (1916). 


6  COMMERCIAL  ARBITRATION 

dam  were  permitted  to  elect  one  Schout  (Sheriff),  two 
Burgomasters  (Mayors)  and  five  Schepens  (Aldermen). 
This  court  continued  during  the  remainder  of  the  Dutch 
rule,  and  by  proclamation  of  Governor  Nicolls  on  June 
12,  1665,  when  the  town  came  under  English  sovereignty, 
it  became  known  as  the  Court  of  the  Mayor  and  Aldermen, 
or  Mayor's  Court;  and  later,  when  New  York  became  an 
independent  State,  it  became  the  Court  of  Common  Pleas 
for  the  City  and  County  of  New  York.  In  1874  the  Legis- 
lature created^"  within  the  City  of  New  York  the  office  of 
"Arbitrator  of  the  Chamber  of  Commerce  of  the  State  of 
New  York, ' '  and  the  following  year  fixed  -"^  the  salary  at 
ten  thousand  dollars  a  year.  Though  no  salary  was  ap- 
propriated immediately,  in  the  year  1878  twenty  thousand 
dollars,  representing  two  years '  salary,  was  appropriated  ^^ 
for  the  arbitrator  and  six  thousand  dollars  for  a  clerk. 
This  act  repealed  the  provision  for  the  salary  of  the  arbi- 
trator and  clerk.  The  court  was  opened  for  business  on 
the  15th  of  October,  1874,  and  continued  to  sit  until  the 
year  1881,  though  no  provision  had  been  made  for  the 
compensation  of  an  arbitrator  subsequent  to  1878;  and 
until  his  death  Enoch  L.  Fancher  acted  as  judge  of  that 
court,  serving  without  compensation.  The  laws  providing 
for  the  establishment  of  the  tribunal  have  never  been 
repealed.^- 

Judge  Lauer,  speaking  of  the  Arbitration  and  Concilia- 
tion Branch  of  the  Municipal  Court  now  existing  pursuant 
to  the  recent  amendment  of  §6  of  the  Municipal  Court 
Code,  permitting  that  Court  "to  provide  systems  of  concili- 
ation and  arbitration  and  to  enter  judgment  upon  an  award 
of  arbitrators,"  says  that  this  branch  of  the  Court  "will 
be  a  place  to  settle  disagreements,  not  to  fight  them  out.    It 


«L.  1874,  c.  278. 

*L.  1875,  c.  495,  §6. 

»L.  1878,  c.  252. 

^' See  further  upon  this  subject,  Chapter  xx'i,  post. 


BUSINESS  MEN'S  TRIBUNALS  7 

will  not  only  save  time  and  money;  it  will  save  fighting. 
If  it  doesn't  always  bring  exact  justice,  it  will  often  bring 
something  better.  It  will  bring  a  friendly  understanding, 
a  thing  almost  impossible  at  the  end  of  a  contested  suit. ' '  ''^ 
In  a  report  made  in  the  reign  of  Henry  II  on  the  customs 
of  Newcastle  on  Tyne  as  they  existed  during  the  reign  of 
Henry  I,  the  following  sentence  appears  r*  "Inter  btir- 
gc7isem  et  mercatorem  si  placitum  oriatur,  finiativr  mite 
tertiam  refluxionem  maris,"  indicating  a  mercantile  court 
doing  speedy  justice.  And  again,  in  the  Doomsday  of 
Ipswich,  drawn  up  in  the  nineteenth  year  of  Edward  I,  a 
recension  of  the  old  book  of  the  second  year  of  John,  it  is 
stated  that  whereas  pleas  between  persons  sitting  and 
dwelling  in  the  town  should  be  pleaded  "by  two  days  in 
the  week,"  the  merchant  stranger  is  treated  with  the 
greater  consideration  which  seemingly  was  everywhere 
shown  to  him: — 

"The  plees  betwixe  straunge  folk  that  men  clepeth 
pypoudrous,  shuldene  ben  pleted  from  day  to  day.  .  .  .  The 
plees  in  tyme  of  feyre  betwixe  straunge  and  passant  shul- 
dene bene  pleted  from  hour  to  hour  .  .  .  and  the  plees 
yoven  to  the  lawe  maryne,  that  is  to  wite,  for  straunge 
marynerys  passaunt  and  for  hem  that  abydene  not  but  her 
tyde,  shuldene  been  pleted  from  tyde  to  tyde. " 

Baldasseroni  says  concerning  arbitration:  "By  this 
mode  of  settling  disputes,  law-suits  are  nipped  in  the  bud, 
the  restraints  of  forms  of  process  are  thrown  aside,  and 
the  mind  of  the  merchant  is  not  distracted  from  his  own 
business  by  the  conduct  of  the  suit. ' '  -°  Bell  ^®  comments 
upon  the  statute  13  and  14  Vict.  c.  36,  by  which  provision 
was  made    (§50)   to  enable  parties  to  agree  by  mutual 

"Lauer,  p.  73. 

"  Carter,  p.  269. 

"Delle  Assicurazioni  Maritt. :  Del  Tratt.  dell'  Avar.  T.  10,  Dei 
Giudizj,  sec.  38.  Ed.  Firenze.  1786,  Tomo  III,  p.  154.  (Quoted  by 
Bell:     "Law  of  Arbitration  in  Scotland,"  p.  6.) 

"  Bell :     ' '  Law  of  Arbitration  in  Scotland, ' '  p.  14. 


8  COMMERCIAL  ARBITRATION; 

consent,  in  any  case  before  the  Court  of  Session  in  which 
an  issue  was  to  be  tried,  to  have  it  tried  before  one,  three, 
five,  or  seven  arbitrators,  sworn  and  sitting  as  a  jury.  "It 
was  declared,"  says  he,  "that  the  sole  arbiter, — or,  where 
there  were  several  arbiters,  a  majority  of  their  number, — 
should  have  all  the  powers  of  a  unanimous  jury.  It  was 
apparently  intended  by  this  means  to  afford  one  method 
of  supplying  what  is  still  so  much  wanted  in  jury  trial; 
the  power  of  selecting  a  tribunal,  composed  of  persons  who 
are  specially  fitted,  hy  experience  or  otherwise,  for  dealing 
with  the  particular  question  to  he  tried, — such  as  a  jury 
of  merchants  to  try  a  msrcantile  question  arising  among 
partners;  or  the  like.**^'' 

The  London  Times  in  an  editorial  in  1891  (May  8),  at  a 
time  when  the  relative  value  of  judicial  disposition  of 
commercial  controversy  as  compared  with  arbitration  by 
business  men  was  under  public  discussion,  said: 

"Long  before  1883  there  had  grown  up  a  class  of  arbitra- 
tors who,  with  all  their  shortcomings,  were  expeditious 
and  acquainted  first-hand  with  the  subject-matter  in  dis- 
pute. All  their  lives  they  had  handled  the  cotton,  wool, 
or  seeds  over  which  the  parties  were  quarreling.  They 
had  written,  made  advances,  bought  and  sold  upon  the 
documents,  the  construction  of  which  was  in  question. 
They  had  obeyed,  perhaps  helped  to  form,  the  trade  cus- 
toms to  which  the  disputants  appealed.  That  class  of  ex- 
perts has  increased.  Their  skill  has  grown  with  experience, 
and  it  is  altogether  too  late  to  think  of  ousting  them." 

And  Mr.  Rosenbaum,  a  modern  student  of  the  subject, 
says  in  his  "Report  on  Commercial  Arbitration  in  Eng- 
land" (made  for  the  American  Judicature  Society,  Bulle- 
tin XII)  :  "What  was  true  in  1891  is  even  more  true  in 
1916,  and  tvary  business  has  its  expert  arbitrators,  gen- 
erally older  and  seasoned  veterans  who  were  in  the  thick 
of  the  fight  for  years  and  retired  to  make  way  for  the 

"  Italics  ourB. 


BUSINESS  MEN'S  TRIBUNALS  9 

younger  men. "  ^^  In  the  Chamber  of  Commerce  of  New 
York,  the  Committee  on  Arbitration  reports  that  "The 
simple,  genuine  confidence  with  which  the  business  man 
approaches  your  Committee  and  submits  his  troubles  is 
very  marked.  While  he  may  not  always  get  the  award  that 
he  expects,  any  more  than  he  may  always  realize  his 
expectations  in  a  lawsuit,  those  who  have  used  our  facili- 
ties have  been  (with  but  possibly  one  exception)  satisfied 
with  the  awards  of  the  arbitrators.  There  has  been  no 
case  as  yet  in  which  resort  to  the  courts  has  been  necessary 
to  enforce  an   award. ' '  ^^ 

**  American  Judicature  Society,  Bulletin  XII,  by  Samuel  J.  Rosen- 
baum,  p.  53. 
"Report  of  the  Committee  on  Arbitration,  1917. 


CHAPTER  II 

THE  PREVENTION  OF  UNNECESSARY  LITIGATION 

Endorsed  upon  the  pamphlet  printed  and  distributed 
by  the  American  Bar  Association,  containing  the  Canons 
of  Ethics  for  the  conduct  of  the  Bar,  appears  this  quota- 
tion from  Lincoln:  "Discourage  litigation.  Persuade  your 
neighbors  to  compromise  whenever  you  can.  Point  out  to 
them  how  the  nominal  winner  is  often  a  real  loser — in 
fees,  expenses  and  waste  of  time.  As  a  peacemaker,  the 
lawyer  has  a  superior  opportunity  of  being  a  good  man." 
Recently  the  lawj^ers  of  the  State  of  New  York  have  taken 
this  injunction  very  much  to  heart.  The  Committee  on 
Prevention  of  Unnecessary  Litigation  was  created  by  the 
State  Bar  Association  in  1914.  In  1917,  in  an  exhaustive 
report,  it  referred  to  the  system  of  commercial  arbitration 
existing  under  the  rules  of  the  Chamber  of  Commerce  of 
the  State  of  New  York  and  said  concerning  its  own  plan: 
"The  proposed  by-law  and  rules  are  modeled  after  those 
of  the  New  York  Chamber  of  Commerce,  which  has  main- 
tained a  system  of  arbitration  almost  continuously  for 
more  than  a  hundred  years."  The  committee  recommended 
that  the  State  Bar  Association  supplement  the  facilities  of 
the  Chamber  of  Commerce  by  providing  an  official  list  of 
arbitrators  made  up  of  members  of  the  Bar.  Earlier,  and 
in  1914,  Percy  Werner,  a  member  of  the  St.  Louis  Bar, 
wrote  concerning  the  desirability  of  lawyers  as  arbitra- 
tors: "...  where  parties  having  a  private  disagreement 
which  they  are  unable  to  settle  resort  to  lawyers  who  are 
likewise  unable  to  bring  about  an  accord  and  satisfaction, 
these  lawyers  shall  elect  from  among  their  fellow-members 

10 


UNNECESSARY  LITIGATION  11 

of  the  bar  a  judge  before  whom  to  try  their  case,  follow- 
ing the  statutory  form  for  arbitrations.  Their  agreement 
of  submission,  stating  the  subject  matter  of  the  contro- 
versy, with,  of  course,  sufficient  certainty  that  it  can  always 
be  used  in  support  of  proof  of  res  adjiidicata,  constitutes 
the  only  pleading  in  the  case.  Mere  matters  of  procedure, 
as  to  time,  place  and  manner  of  trial,  are  regulated  by  the 
attorneys  and  arbitrator,  or  controlled  by  the  latter,  as 
may  best  suit  the  convenience  of  all  concerned."  At  the 
1916  session  of  the  New  York  State  Bar  Association,  the 
committee  was  authorized  to  negotiate  with  the  Chamber  of 
Commerce  for  the  adoption  of  "Rules  for  the  Prevention 
of  Unnecessary  Litigation."  As  a  result  of  these  efforts, 
there  was  jointly  prepared  and  is  now  circulated  a  printed, 
pamphlet  entitled  "Rules  for  the  Prevention  of  Unneces- 
sary Litigation, ' '  ^  among  which  is  included  the  follow- 
ing advice  (under  the  heading  "Prevention  of  Litigation 
after  the  Facts  Become  Fixed  and  before  Suit") : 

"After  the  facts  upon  which  a  dispute  can  be  based 
have  become  fixed,  either  before  or  after  a  dispute  has 
arisen,  it  is  possible  to  do  much  to  prevent  litigation. 
What  can  best  be  done  in  each  case  and  whether  with  or 
without  legal  advice,  necessarily  depends  upon  the  facts 
and  the  parties  to  the  prospective  controversy.  Differences 
may  be  minimized,  adjusted  or  arbitrated.  If  not  so  dis- 
posed of,  litigation  will  usually  ensue." 

Arbitration. — "Where  differences  cannot  be  adjusted 
between  the  parties  or  their  attorneys  and  the  interven- 
tion of  a  third  party  becomes  necessary,  there  are  several 
forms  which  arbitration  may  take.  The  arbitration  may 
be  (1)  informal,  (2)  under  the  Code,  (3)  under  the  aus- 
pices of  a  commercial  body,  or  (4)  under  the  auspices  of 
a  bar  association. 

' '  The  experience  of  many  business  men  and  lawyers  tes- 

^  See  Appendix  A. 


12  COMMERCIAL  ARBITRATION 

tifies  to  the  advantage  of  these  methods  of  adjusting  dif- 
ferences wherever  possible.  They  are  inexpensive,  speedy 
and  peaceful." 

From  this  brief  survey  of  the  official  activity  of  the 
Bar  of  the  State  of  New  York,  it  will  be  seen  that  it  is  made 
the  affirmative  duty  of  members  of  the  Bar  to  avert 
the  clashes,  the  bitternesses  and  the  waste  of  litigation^  It 
is  regarded  as  a  high  virtue  to  settle  a  controversy  with- 
out suit  or  by  arbitration,  if  it  can  be  done.  Nor  is  this 
movement  confined  to  the  Bar  of  New  York  State.  In  an 
article  appearing  in  the  London  Law  Journal,  entitled 
* '  Law^^'ers  and  Conciliation, "  it  is  stated :'  "  Both  in 
external  and  internal  affairs  the  movement  for  the  peaceful 
settlement  of  differences  is  making  remarkable  progress 
before  our  eyes." 

How,  then,  can  it  be  argued  that  it  is  part  of  the  duty 
of  the  Court  to  prevent  parties  from  settling  their  con- 
troversies in  any  manner  they  choose?  As  a  matter 
of  fact,  the  Court  is  assiduous  to  enforce  releases  unless 
they  have  been  procured  through  fraud  or  mistake.  In 
disposing  of  accounts  stated,  the  Court  is  exceedingly  re- 
luctant to  disturb  adjustments  that  have  been  made, 
yet  by  virtue  of  such  settlements  or  exchange  of  releases 
sometimes  grave  questions  of  law  are  kept  from  determina- 
tion by  the  Court — often  questions,  the  determination  of 
which  would  contribute  much  to  the  comprehensive  de- 
velopment of  the  common  law.  From  the  point  of  view 
of  society,  in  some  instances  it  might  sometimes  be  better 
to  secure  a  determination  of  the  particular  question  of 
constitutional  or  other  law  involved;  yet  this  considera- 
tion has  never  prevailed  with  the  Court,  nor  resulted  in 
the  rejection  of  an  adjustment  or  a  settlement  of  the  con- 
troversy, with  the  consequent  waiver  and  elimination  of 
an   interesting  and   perhaps  important  question  of  law. 

»44  Lmdon  Law  Journal   (Feb.  20,  1909),  p.  114. 


UNNECESSARY  LITIGATION  13 

Judge  Allen,  speaking  for  the  Court  of  Appeals,'  said,  in 
1872,  that  the  rule  permitting  revocation  of  submissions  to 
arbitration  owes  its  origin  in  large  measure  to  an  aversion 
of  the  courts,  "from  reasons  of  public  policy,  to  sanction 
contracts  by  which  the  protection  which  the  law  affords 
the  individual  citizens  is  renounced,"  But  Judge  Allen 
went  on  to  say  that  *  *  The  tendency  of  the  more  recent  de- 
cisions is  to  narrow  rather  than  enlarge  the  operation  and 
effect  of  prior  decisions,  limiting  the  power  of  contracting 
parties  to  provide  a  tribunal  for  the  adjustment  of  possible 
differences,  without  a  resort  to  courts  of  law."*  "The 
tetter  way,  doubtless,  is  to  give  effect  to  contracts,  when 
lawful  in  themselves,  according  to  their  terms  and  the 
intent  of  the  parties;  and  any  departure  from  this  prin- 
ciple is  an  anomaly  in  the  law,  not  to  be  extended  or  ap- 
plied to  new  eases  unless  they  come  within  the  letter  and 
spirit  of  the  decisions  already  made."  ^  A  recent  Pennsyl- 
vania court  (1913)  held°  that  the  constitutional  guaran- 
tees of  liberty  and  property  forbid  the  Legislature  to 
declare  invalid  any  clause  in  a  contract  whereby  an  ar- 
bitrator's award  is  made  conclusive  of  the  rights  of  the  par- 
ties thereunder.  The  Court  holds  that  freedom  of  con- 
tract may  not  be  abridged  except  in  the  interest  of  good 
morals  or  the  welfare  of  the  general  public,  and  that  the 
statute  in  question  promotes  neither  of  these  ends.  In 
a  note  discussing  the  decisions  defining  the  scope  of  the 
legislative  power  to  limit  freedom  of  contract  it  is  said 
that '  * '  The  best  considered  decisions  overthrowing  legisla- 
tion as  repugnant  to  the  due  process  clause  recognize  a 
police  power  as  broad  as  this  (protecting  citizen  against 
himself  as  well  as  to  shield  him  from  acts  of  others),  but 

'Delaware,  etc.,  Canal  Co.  v.  The  Pennsylvama  Coal  Compaaiy,  50 
N.  Y.  250,  at  p.  258. 
*Il)id.,  p.  259. 

'Ibid.,  pp.  258-259.     Italics  ours. 
'Adinolfi  V.  Eazlett,  242  Pa,  25,  88  Atl.  869. 
*  27  Harvard  Lata  Beview,  p.  374. 


14  COMMERCIAL  ARBITRATION 

hold  that  the  constitution  declares  a  strong  public  pol- 
icy in  favor  of  letting  every  citizen  work  out  his  own 
salvation,  and  that  his  power  to  do  so  should  not  be  im- 
paired except  when  necessary  to  correct  an  evident  exist- 
ing evil."  And  a  recent  writer  on  "Public  Policy" 
says : 

"(1)  In  general  any  contract  made  by  a  competent 
party,  upon  valuable  consideration,  when  made  freely  and 
intelligently,  is  valid,"  unless  (2)  it  "bind  the  maker  to  do 
something  opposed  to  the  public  policy  of  the  State  or  Na- 
tion, or  conflicts  with  the  wants,  interests,  or  prevailing 
sentiment  of  the  people,  or  our  obligations  to  the  world,  or 
is  repugnant  to  the  morals  of  the  times,"  then  "it  is  void, 
however  solemnly  the  same  may  be  made. ' '  * 

"By  'public  policy'  is  intended  that  principle  of  the  law 
which  holds  that  no  subject  can  lawfully  do  that  which 
has  a  tendency  to  be  injurious  to  the  public  or  against 
the  public  good,  which  may  be  termed  the  policy  of  the 
law,  or  public  policy  in  relation  to  the  administration  of 
the  law."» 

It  has  long  been  settled  that  the  prevention  of  litigation  is 
a  valid  and  sufficient  consideration  for  the  settlement  of  a 
controversy;  "/or  the  law  favors  the  settlement  of  dis- 
putes."''' 

"No  investigation  into  the  character  or  value  of  the 
different  claims  submitted  will  be  entered  into  for  the 
purpose  of  setting  aside  a  compromise,  it  being  sufficient 

'Greenhood,  "The  Doctrine  of  Public  Policy  in  the  Law  of  Con- 
tracts," p.  1. 

*  Ibid.,  p.  2.    See  Egerton  v.  Broivnlow,  4  H.  L,  C.  1. 

See  arbitration  cases:  Nute  v.  Hamilton  Mut.  Ins.  Co.,  6  Gray  174; 
Tobey  v.  The  County  of  Bristol  ct  al.,  3  Story  800,  821, 

^^  Parsons,  ' '  Law  of  Contracts, ' '  Vol.  I,  p.  *438.  See  Penn  v.  Lord 
Baltimore,  1  Ves.  Sen.  444;  Wiseman  v.  Boper,  1  Chanc.  158;  Barlow 
V.  Ocean  Ins.  Co.,  4  Met.  270;  Stapilton  v.  Stapilton,  1  Atk.  3; 
Zone  V.  Zone,  6  Munf.  406;  Taylor  v.  Putrid',  1  Bil)b  168;  Fisher 
V.  May,  2  Bibb  448;  Broivn  v.  Sloan,  6  Watts  321;  Stoddard  v.  Mix, 
14  Conn.  12 ;  Bice  v.  Bixler,  1  W.  &  S.  456. 


UNNECESSARY  LITIGATION  15 

if  the  parties  entering  into  the  compromise  thought  at  the 
time  that  there  was  a  question  between  them."  " 

So  that  we  may  conclude  upon  this  examination  of  the 
subject  that,  just  as  it  is  the  duty  of  the  Bar  to  dispose 
of  controversy  amicably  without  resort  to  the  courts,  it 
is  at  this  date  an  accepted  doctrine  of  the  common  law 
that  efforts,  honestly  made,  by  parties  seeking  to  settle 
their  differences  out  of  court,  are  to  be  encouraged  and 
enforced  by  the  court;  and  that  whatever  may  have  been 
the  influences  affecting  a  different  procedure  in  the 
past,  in  this  day  there  is  no  disposition  to  guard 
with  any  jealousy  ''the  jurisdiction  of  the  courts. "^^  In 
a  footnote  to  Corpus  Juris  ^^  the  rule  of  revocation  is 
called  "a  highly  technical  rule,  and  the  enforcement  of  it 
against  the  purposes  of  parties  who  have  sought  a  settle- 
ment of  their  disputes  out  of  court  by  a  tribunal  of  their 
own  choosing  has  at  times  provoked  protest  from  common- 
law  judges." 

Says  Grier,  J.,  in  Fox  v.  The  Railroad:  ^*  "Such  a  clause 
in  contracts  like  those  constantly  made  by  corporations  for 
great  public  improvements,  is  absolutely  necessary  to  pre- 
vent the  corporations  from  being  ruined  by  endless  litiga- 
tion. It  should  be  liberally  construed  and  not  subjected  to 
ingenious  criticism  in  order  to  support  the  jurisdiction  of 
courts  of  law  and  encourage  litigation."^® 

We  shall  examine  the  protest  made  in  1915  by  Judge 

"Parsons,  "Law  of  Contracts,"  p.  *439.  Ex  parte  Lucy,  21  E.  L. 
&  E.  199;  Mills  v.  Lee,  6  Monr.  91;  Moore  v.  Fitzwater,  2  Rand. 
(Va.)  442;  Bennet  v.  Paine,  5  Watts  259;  Pierson  v.  McCahill,  21 
Cal.  122;  Clark  v.  Gamivell,  125  Mass.  428;  Flannagan  v.  Kilcome, 
58  N.  H.  443. 

"  Del,  etc.,  Canal  Co.  v.  The  Pennsylvania  Coal  Company,  50  N.  Y. 
250;  Judge  Allen  at  p.  258  et  seq. 

"Vol.  5,  p.   53,  note  12a. 

"  3  Wall.  Jr.  243,  at  p.  247. 

"See  also  Monongahela  Navigation  Co.  v.  Fenlon  (1842),  4  Watts 
&  Sergeant  205;  Calvin  v.  Provincial  Insurance  Co.,  27  Up.  Can. 
Q.  B.  403;  Grier  v.  Bihjer,  13  Pa.  58  (1850);  Snodgrass  V.  Gavit, 
28  Pa.  221    (1857),  and  Appendices  D  and  E. 


16  COMMERCIAL  ARBITRATION 

Hough,  an  honored  member  of  the  Federal  Circuit  Court 
of  Appeals  of  the  Southern  District  of  New  York,  but  as 
early  as  1855  Baron  Martin  expressed  his  views  as  fol- 
lows: 16  "I  regret  that  the  law  is  so,  and  that  the  legisla- 
ture, when  they  were  dealing  with  the  subject  of  arbitra- 
tion, did  not  in  all  cases  prohibit  the  revocation  of  refer- 
ences."  Maule,  J,,  is  reported  to  have  said:^^  "The  old 
rule  upon  which  it  was  held  that  the  power  of  an  arbitrator 
was  revocable,  was,  that  a  power  not  coupled  with  an  in- 
terest, was  revocable, — revocable  by  the  authority  which 
created  it.  From  that  rule  it  was  inferred, — erroneously, 
as  I  think, — that  one  of  the  parties  to  a  submission  might 
revoke  without  the  other.  It  seems  to  me  that  that  was  al- 
lowing one  man  to  affect  the  interest  of  another.  But  it 
was  an  inveterate  error.'*  ^^ 

It  has  been  repeatedly  held  that  parties  may  stipulate 
that  the  laws  of  another  place  or  another  country  than  the 
one  wherein  the  contract  is  made  shall  govern  its  interpre- 
tation and  remedy  both  as  to  the  rights  of  the  parties  and 
their  remedies  in  case  of  a  breach.^®  Parties  may  even  by 
stipulation  waive  their  right  to  appeal.^**  There  is  strong 
authority,  also,  as  we  shall  presently  find,  for  the  legal 

''**  Mills  V.  Bayley,  21.  .H.  &  C.  36,  41. 

^Northampton  Gas-Light  Co.  v.  Parnell,  15  C.  B.  630,  645,  8a 
ECL  630,  139  English  Reprint  572. 

"  Italics  ours. 

*'See  McAllister  v.  Sviith,  17  111.  328,  334;  Union  National  Bank 
V.  Chapman,  169  N.  Y.  538,  545;  Grand  v.  Livingston,  4  App.  Div. 
589,  593,  596,  affirmed  158  N.  Y.  688;  Dike  v.  Frie  Railway  Co.,  41 
N.  Y.  113,  116;  Le  Breton  v.  Miles,  8  Paig«  261;  Greer  v.  Poole, 
L.  B.  5  Q.  B.  D.  272. 

*'Townsend  v.  Masterson,  15  N.  Y.  587;  O.  ^-  L.  C.  B.  R.  Co.  v. 
r.  4-  C.  R.  R.  Co.,  63  N.  Y.  176;  Godfrey  v.  Moser,  66  N.  Y.  250; 
Biggs  v.  C.  M.  Ins.  Co.,  125  N.  Y.  7;  Palmer  v.  Lavers,  105  N.  E. 
1000  (Mass.  Supreme  .Tud.  Ct.  1914) ;  Eoste  v.  Dalton,  137  Mich. 
522;  Watson  v.  Wetter,  91  Pa.  385.  Contra  Muldrotr  v.  Norris, 
2  Cal.  74;  Falis  v.  Darling,  82  III.  142;  Bank  v.  White,  220  Mo.  717, 
736. 

See  also  People  v.  Stephens,  52  N.  Y.  306 ;  Biggs  v.  C.  M.  Ins.  Co., 
125  N.  Y.  7  (25  N.  E.  1058,  10  L.  R.  A.  684,  21  Am.  St.  R«p.  716); 
Sogers  v.  Play  ford,  12  Pa.  181. 


UNNECESSARY  LITIGATION  IT 

proposition  that  parties  may  select  the  courts  in 
which  the  case  is  to  be  tried  in  the  event  of  controversy 
between  tliem.  Though  this  has  been  controverted,  much 
the  better  authority  supports  the  view.^^  Judge  Parker, 
in  the  case  of  La  Greve  v.  ^tna  Live  Stock  Insurance 
Co.,-'^  said:  "The  suggestion  that  the  Court  should  resent 
this  attempt  to  oust  it  of  jurisdiction  is  unworthy  of  ex- 
tended notice";  and  a  great  English  judge  (Jessel,  M.  R.) 
said:  **.  .  .  if  there  is  one  thing  which  more  than  an- 
other public  policy  requires  it  is  that  men  of  full  age  and 
competent  understanding  shall  have  the  utmost  liberty  of 
contracting,  and  that  their  contracts  when  entered  into 
freely  and  voluntarily  shall  be  held  sacred  and  shall  be 
enforced  by  Courts  of  justice. '*^^  So,  also,  the  late  Judge 
Earl  of  the  New  York  Court  of  Appeals  said:  "Parties 
by  their  stipulations  may  in  many  ways  make  the  law 
for  any  legal  proceeding  to  which  they  are  parties,  which 
not  only  binds  them,  but  which  the  courts  are  bound  to 
enforce. ' '  ^*  This  superb  policy  of  the  law  is  illustrated 
in  many  ways.  The  parties  to  a  contract  may  require  the 
commencement  of  an  action  within  a  period  shorter  than 
that  required  by  Statutes  of  Limitations  and  thus  make 
their  own  Statute  of  Limitation. ^^    They  may  limit  their 


^ See  "The  Legality  of  Contracts  Affecting  the  Jurisdiction  of 
Courts,"  by  G.  B.  Slaymakor,  58  Cent.  L.  J.  64,  6.5;  Mittenthal  v. 
Mascagni,  183  Mass.  19;  Austrian  Lloyd  Steamship  Co.  v.  Gresham 
Life  Assurance  Society,  L.  B.  [1893]  1  K.  B.  D.  249  (see  also  post, 
p.  217)  and  brief  of  Walter  H.  Pollak  in  Engel  v.  Shubert  Co.,  N.  Y. 
Supreme  Court,  App.  Div.,  1st  Department,  166  App.  Div,  394,  V. 
3071  Bar  Association  Reports. 

=  81  Hun  28,  at  p.  30. 

'^  Printing  and  Numerical  Begistering  Co.  v.  Sampson,  L,  R.  19 
Eq.  462,  at  p.  465. 

"  Matter  of  N.  Y.,  L.  4-  W.  B.  B.  Co.,  98  N.  Y.  447,  at  p.  453. 

'^Erie  B.  B.  Co.  v.  Stone,  37  Sup.  Ct.  Rep.  633;  Ames  v.  N.  Y. 
Union  Ins.  Co.,  14  N.  Y.  253,  262;  Bipley  v.  Aetna  Ins.  Co.,  30  N.  Y. 
136,  163 ;  Boach  v.  N.  Y.  #  Erie  Co..  30  N.  Y.  546 ;  Mayor  of  New 
Yorh  V.  Hamilton  Fire  Insurance  Co.,  39  N.  Y.  45;  Wilkinson  v. 
First  National  Fire  Insurance  Co.,  72  N.  Y.  499;  Eetchum  v. 
Beldvng,  58  App.  Div.  295;  Clemens  v.  American  Fire  Insurance  Co., 


18  COMMERCIAL  ARBITRATIONi 

liability  for  negligence  ^^  and  may,  indeed,  provide  an 
exclusive  form  of  remedy  which  the  courts  will  enforce.^'' 

Herbert  Harley,  Secretary  of  the  American  Judicature 
Society,  in  an  introduction  to  Bulletin  XII  issued  by 
his  Society  in  October,  1916,  says:  "The  present  uni- 
versal fear  of  litigation,  with  its  slow  and  costly  pro- 
cedure and  interminable  appeals,  is  a  principal  reason  for 
this  irregular  method  of  reaching  a  settlement — for  it 
ought  not  to  be  dignified  by  the  name  of  arbitration. 
Its  fault  is  not  merely  that  of  inexpertness  but  that  it 
is  dominated  by  compulsion,  not  by  mutuality.  Arbitra- 
tion is  the  means  by  which  this  growing  function  is  to 
be  methodized  and  regulated  in  a  public  manner.  It 
should  be  viewed,  not  as  hostile  to  courts  but  as  a  special 
method  of  adjudication  adapted  to  certain  modern  needs, 
a  new  arm  of  the  law  supplementing  courts  in  a  prac- 
tical way." 

This  Bulletin  is  itself  an  illustration  of  the  growing 
tendency  of  the  American  Bar  to  treat  arbitration  as  a 
necessary  and  important  means  for  securing  justice  with- 
out resort  to  the  courts.    As  Mr.  Harley  says: 

"New  ways  of  living  and  transacting  business  imply 
new  machinery  in  the  law.  Society  is  constantly  devising 
new  tools  to  accomplish  its  work  more  economically.  Com- 
mercial disputes,  aside  from  their  technical  nature,  are 
different  in  an  essential  way.  In  the  law  the  rendering'^^^ 
of  exact  justice  in  the  matter  presented  is  a  final  aim. 
But  in  business  the  settlement  of  a  given  dispute  is  not 
the  most  important  thing.  The  big  thing  is  the  rela- 
tionship between  the  parties.     In  its  formal  tribunals  the 

70  App.  Div.  435;  Williams  v.  Fire  Association  of  Philadelphia,  119 
App.  Div.  573;  Biddlesbarger  v.  Hartford  Insurance  Co.,  7  Wall. 
386  (collecting  authorities) ;  Fullam  v.  N.  Y.  Union  Insurance  Co.,  7 
Gray  61. 

*'Andersfm  v.  Erie  R.  B.  Co.,  171  App.  Div.  687. 

**  See  Hickman  v.  Sawyer,  216  Fed.  Rep.  281  and  cases  cited. 


UNNECESSARY  LITIGATION  19 

law  must  ignore  this  preservation  of  relations  between  the 
parties,  however  momentous. 

"The  essential  difference  appears  to  he  that  compulsion 
is  the  central  feature  of  judicial  procedure,  while  mu- 
tuality and  voluntary  submission  underlie  arbitration,  giv- 
ing it  validity  and  affording  a  basis  for  successful  con- 
tinuance of  business  relations.  Arbitration  is  thus  seen 
as  a  constructive  social  function  weaving  into  the  fabric 
of  conmiercial  life  to  strengthen  rather  than  sever  its 
threads." 

To  encourage  and  widen  the  field  of  arbitration,  the 
Society  engaged  Samuel  G.  Rosenbaum,  of  the  Philadelphia 
Bar,  to  make  a  study  of  Commercial  Arbitration  in  Eng- 
land. Mr.  Rosenbaum,  after  seven  months  in  1915,  made 
his  report,  which  the  Society  published  as  Bulletin  No. 
XII. 

Space  will  not  permit  free  quotation  from  this  valuable 
document.  But  the  following  references  will  give  some 
indication  of  the  very  general  use  to  which  arbitration  is 
now  put  in  England. 

"Efficient  though  the  English  courts  are  in  disposing 
of  all  but  3  per  cent  of  their  great  volume  of  business 
without  letting  it  come  to  trial,  there  is  a  large  mass  of 
disputes  in  mercantile  and  other  matters  that  is  never 
brought  into  the  duly  constituted  courts  of  law  at  all. 
These  disputes,  instead  of  forming  the  basis  of  lawsuits, 
are,  for  a  variety  of  causes,  and  in  a  variety  of  modes, 
submitted  to  arbitration,  and  there  has  grown  up  in  Eng- 
land a  law,  practice  and  custom  of  arbitration,  which  is 
daily  growing  in  bulk  and  authority  and  may  almost  be 
said  to  amount  to  a  system  of  jurisprudence  in  itself. 

"The  greatest  impetus  to  the  spread  of  arbitration  in 
England  was  due  to  the  American  Civil  War. 

"During  and  after  that  conflict  there  was  an  enormous 
number  of  disputes  between  cotton  shippers  and  traders 
in  the  South,  on  one  side,  and  the  factors  in  the  Liverpool 


20  COMMERCIAL  ARBITRATION 

cotton  market  on  the  other,  ranging  from  differences  over 
liability  for  war  risks  to  the  condition  in  which  shipments 
of  cotton  were  arriving  in  the  Mersey.  So  many  arbitra- 
tions were  taking  place  at  that  time  in  the  Liverpool 
market  that  the  Liverpool  Cotton  Association,  an  organiza- 
tion composed  of  brokers  and  buyers  in  the  trade,  set  up 
an  Arbitration  Comjnittee  to  pass  on  all  questions  in  dis- 
pute and  the  members  inserted  in  all  their  contracts  a 
clause  requiring  disputes  to  be  submitted  to  the  Arbi- 
tration Committee  of  their  Association.  The  success  of 
the  plan  strengthened  the  position  of  the  Association  in 
the  trade,  and  that,  in  turn,  increased  the  power  of  the 
Arbitration  Committee  so  that  practically  every  difference 
that  arose  in  the  Liverpool  cotton  market  between  buyers 
and  sellers,  whether  English  or  foreign,  came  to  the  Ar- 
bitration Committee  for  settlement. 

"Other  trades  were  quick  to  see  the  advantage  of  this 
system  of  organized  arbitration.  The  Liverpool  Com 
Trade  Association  soon  established  a  similar  committee, 
and  then  the  General  Brokers'  Association  followed  suit. 
The  London  markets  next  took  it  up ;  the  associations  ex- 
isting in  the  Corn  Trade,  the  Oil  Seed  Trade,  the  Cotton 
Trade,  the  Coffee  Trade,  and  others,  set  up  their  own 
arbitration  committees,  and  year  by  year,  other  associa- 
tions either  adopted  the  plan  or  came  into  existence  with 
trade  arbitration  as  one  of  their  avowed  objects.  The 
various  exchanges  all  molded  their  committees  on  similar 
lines — the  Stock  Exchange,  the  Coal  Exchange,  the  Prod- 
uce Exchange,  and  others.  Then  professional  bodies 
began  to  see  the  advantage  of  providing  a  medium  for  set- 
tling disputes  at  home  instead  of  by  strangers,  and  the 
Architects,  the  Engineers,  the  Estate  Agents,  the  Auc- 
tioneers and  other  such  groups  established  domestic  tri- 
bunals." 

The  result  is  that  "Today  there  is  not  a  trade  or  pro- 
fessional organization  in  England  that  does  not  provide 


UNNECESSARY  LITIGATION  21 

some  means  for  the  arbitration  of  disputes  that  arise 
among  members  or  between  members  and  others,  and  fre- 
quently between  non-members  engaged  in  similar  work. 
It  is  not  surprising,  therefore,  that  by  this  means  a 
great  volume  of  litigation  is  avoided  and  commercial  dis- 
putes kept  out  of  court." 

"In  the  Incorporated  Oil  Seed  Association  the  total 
number  of  arbitrations  begun  averages  between  5000  and 
6000  a  year;  roughly  one-half  of  these  are  settled  or 
withdrawn  without  going  further." 

"In  the  London  Corn  Trade  Association  arbitrations 
to  the  extent  of  2000  a  year  are  commenced,  and  the 
appeals  run  from  100  to  300  a  year;  but  there  are  seldom 
more  than  two  or  three  cases  stated  in  a  year.  In  the 
London  Oil  and  Tallow  Trade  Association  about  150  awards 
are  filed  each  year  (which  would  mean  more  than  that 
number  of  arbitrations  commenced)  and  against  those 
about  15  appeals  a  year  are  taken." 

"In  the  London  Jute  Association  there  are  1200  arbi- 
trations commenced  in  a  year.  ..." 

"In  the  Refined  Sugar  Association  (which  is  confined 
solely  to  Continental  refined  sugar)  there  are  about  60 
awards  a  year.  ..." 

*  *  The  Dried  Fruit  Trade  Association  has  about  the  same 
number  and  pursues  the  same  policy  with  regard  to  stating 
a  case.  There  are  many  associations,  such  as  in  the  Cattle 
Pood  Trade,  in  which  arbitrations  run  from  a  dozen  to  a 
hundred  a  year,  out  of  which  no  case  has  ever  been  stated 
to  the  courts." 

"Since  the  war  nearly  all  the  associations  have  had 
occasion  to  state  cases  arising  out  of  disputes  over  the 


22  COMMERCIAL  ARBITRATION 

effect  of  war  on  contracts;  questions  of  liability  for  total 
breach  and  inability  to  perform,  questions  of  insurance 
and  war  risk  at  sea,  questions  arising  out  of  the  familiar 
'Restraints  of  Princes'  clause  in  contracts,  and  questions 
arising  out  of  the  several  international  embargoes,  have 
caused  a  flood  of  litigation  in  the  City,  which,  commencing 
in  the  arbitration  rooms  where  the  facts  were  definitely 
ascertained  and  disposed  of,  is  now  slowly  working  its  way 
westward  through  the  LoM^er  Courts  to  the  House  of 
Lords." 

"That  the  volume  of  arbitrations  has  been  consistently 
large  in  preceding  years  is  borne  out  by  the  following 
phrases  from  legal  journals  for  various  dates: 

"1901 :  'Commercial  men  are  often  heard  to  say  that  arbi- 
tration as  a  means  of  settling  their  many  and  varied  disputes, 
is  infinitely  more  satisfactory  than  recourse  to  ordinary  legal 
tribunals.'     (110  Law  Times  257). 

"1905 :  'In  most  agreements  entered  into  between  parties  now- 
adays, relative  to  commercial  transactions,  we  find  the  introduc- 
tion of  an  arbitration  clause.'    (118  Law  Times  426). 

"1909:  'We  have  every  reason  to  believe  that  the  business  in 
courts  of  arbitration — or  as  they  are  sometimes  called,  the  ir- 
regular tribunals — has  largely  increased.'  (53  Solicitors'  Journal 
424)." 

]\lr.  Rosenbaum  gives  us  a  reference  to  the  1913  volume 
of  the  Civil  Judicial  Statistics  (Parliamentary  Papers 
Cd.  7267)  in  which  Sir  John  Macdonell,  the  King's  Re- 
membrancer, says: 

"The  large  and  rapidly  increasing  number  of  disputes 
are  determined  by  arbitration.  Many  trades  have  com- 
pletely organized  systems  of  arbitration  for  the  settle- 
ment of  disputes  relative  to  quantity  and  quality  of  goods 
and  as  to  the  performance  generally  of  mercantile  con- 
tracts. ]\Iany  of  the  arbitrations  are  conducted  infor- 
mally and  never  come  before  the  courts,  or  if  they  do, 


UNNECESSARY  LITIGATION  23 

only  upon  applications  under  the  Act  of  1889  to  enforce 
awards,  or  for  the  appointment  of  an  arbitrator  or  um- 
pire. 

"It  is  more  and  more  the  practice  to  introduce  an  ar- 
bitration clause  into  contracts,  with  the  result  that  dis- 
putes are  determined  outside  of  the  courts,  no  applica- 
tions being  made  thereto,  except  occasionally,  to  stay  pro- 
ceedings brought  contrary  to  the  terms  of  such  clause.  I 
have  endeavored  to  obtain  some  approximate  figure  as 
to  the  amount  of  disputes  terminated  in  this  manner,  but 
the  data  requisite  even  for  an  approximate  estimate  are 
not  accessible. 

"There  is  very  often  a  clause  in  contracts,  particularly 
for  the  execution  of  works,  that  the  engineer  or  architect 
of  an  employer  is  to  be  the  sole  and  final  judge  in  all 
disputes  which  may  occur  under  the  contract  or  as  to  its 
meaning;  which  may  also  mean  the  withdrawal  from  the 
court  of  disputes  which  would  otherwise  come  before  it." 


CHAPTER  III 

PUBLIC  POLICY  AND   COMMERCIAL  AEBITEATION 

Nearly  all  of  the  writers  on  arbitration,  in  introductions 
to  their  volumes,  have  delved  somewhat  into  the  history  of 
arbitration  in  all  countries  and  in  all  times.  Perhaps 
the  best  of  these  studies  is  to  be  found  in  Bell's  "Law  of 
Arbitration,"  Reference  to  almost  any  of  the  many  works 
cited  in  our  Biblio^aphy  will  confirm  the  statements  in 
this  chapter.  Aristotle  quotes  a  passage  from  Archytas 
in  which  he  compares  an  arbitrator  to  an  altar,  as  being 
a  refuge  for  the  injured.  (Aristotle's  "Rhetoric,"  Liber 
III,  Chap.  II.)  At  Athens  there  Avere  two  kinds  of  pro- 
ceedings that  were  called  arbitration.  For  instance,  the 
Greek  word  for  arbitration  is  diaeta.  In  one  case  the  arbi- 
trators constituted  what  is  described  in  the  "Penny  Cy- 
clopaedia" as  a  "Court  of  Reconcilement."  "An  appeal 
lay  from  their  decision  to  the  ordinary  courts;  and  some- 
times the  arbitrator  referred  the  cause  to  their  judgment 
at  once,  without  pronouncing  any  sentence  of  his  own."^ 
In  the  other  class  of  proceedings  the  parties  were  free  to 
refer  their  differences  to  whomsoever  they  chose.  The  sub- 
mission was  generally  made  by  a  written  agreement,  which 
often  contained  an  engagement  by  third  persons  to  be- 
come sureties  for  its  performance.^  In  these  cases  the 
arbitrator  was  not  required  to  be  governed  by  rigid  ap- 
plications of  the  law,  but  was  free  to  decide  according  to 

*  "Penny  Cyclopaedia,"  Vol.  II,  p.  252,  citing  Eeraldi  Anvmadver- 
aiones,  p.  372. 

'Demosthenes'  Speech  against  Apaturius,  Chapter  4. 

24 


PUBLIC  POLICY  25 

the  merits  of  the  particular  case  before  him.'  But  there 
was  no  appeal  from  his  award  to  any  other  tribunal  what- 
soever.* Bell  says  that  both  in  ancient  and  modem  times 
resort  to  the  settlement  of  disputes  by  arbitration  rather 
than  by  the  intervention  of  courts  of  law  has  been  had  so 
often  that  it  seems  probable  that  the  origin  of  *'this  amica- 
ble private  tribunal  is  of  an  earlier  date  than  the  regular 
establishment  of  public  Courts,  and  that  Arbitration,  in 
fact,  took  its  rise  in  the  very  infancy  of  Society. ' '  ^  That 
whenever  parties  had  a  dispute  that  it  was  inconvenient 
to  settle  by  force  or  violence,  which  nevertheless  required 
a  settlement,  "Nothing  seems  more  likely  than  that  they 
should  bethink  themselves  of  the  expedient  of  referring 
the  question  to  some  mutual  friend,  or  neutral  third  party, 
as  umpire  between  them,  and  agreeing  to  abide  by  his  de- 
cision."^ Bell  regards  the  famous  award  delivered  on 
Mount  Ida  by  the  royal  shepherd  Paris  as  one  cau^e  celebre 
in  the  law  of  arbitration  of  a  date  so  remote  that  it  be- 
longs to  fabulous  antiquity.  {Arbiter  es  formce  certamina 
sisfe  Dearum — Ovid,  "Heroid,  Epist."  xvi,  69.)  And 
it  is  true  that,  as  the  story  goes,  upon  the  failure  of  all 
other  .means  of  adjudicating  on  the  rights  of  rivals,  both 
powerful  and  so  excited,  the  parties  agreed  to  a  submission 
to  Paris  as  sole  arbiter,  and  thus  speedily  determined  by 
final  judgment  a  dangerous  dispute,  balking  the  Goddess 
Discord  of  her  sinister  aim.'    ''Even  after  regular  Courts 

"Aristotle— "Rhetoric,"  I,  14. 

*  See  the  law  quoted  by  Demosthenes  against  Meidias,  Chapter  26. 

•BeU,  p.  1. 

•Ibid. 

*"The  introduction  of  arbitration  seemed  to  be  coeval  with  the 
foundation  of  our  law;"  per  L.  Pres.  Blair,  in  MacCallum,  etc., 
June  26,  1810;  F.  C.  "Lors  des  premieres  societes,  les  differends  se 
jugeaient  par  les  peres  de  famille;  de  Id  est  veiw,  le  nom  de  tribunal 
patriarchal,  donne  a  celui  des  arbitres.  Le  commerce,  aussi  ancien 
que  le  monde,  n'avait  point  autrefois,  pour  ses  faits  civils  et  com- 
merciaux,  d'autre  tribunal."  [English  trans.:  In  the  earliest  forms 
of  society,  disputes  were  tried  by  the  heads  of  families,  whence  is 
derived  the  name  of  patriarchal  tribunal,  now  given  to  the  office  of 
arbitrator.     Commerce,  as  old  as  the  world,  in  former  times  had  for 


'26  COMMERCIAL  ARBITRATION 

of  law  had  been  duly  established,"  says  Bell,^  "and  were 
so  constituted  as  to  command  the  respect  and  confidence 
of  the  community,  recourse  to  arbitration  continued  never- 
theless to  be  frequent  among  many  of  the  most  civilised 
nations,  at  all  periods  of  history." 

Bell  attributes  the  frequent  resort  to  arbitration  as  due 
to  the  fact  that  there  are  many  questions  "which,  in  their 
own  nature,  are  best  suited  for  the  determination  of  a 
judge  who  is  expressly  selected  by  the  parties  themselves 
on  account  of  his  special  fitness  for  trying  cases  of  that 
particular  class.  "^  And  as  illustrations  of  these,  he  finds 
the  purely  mercantile  questions,  such  as  involve  the  ex- 
amination of  merchants'  books  and  accounts  and  "require 
an  intimate  practical  acquaintance  with  commercial  usages 
and  affairs."  "It  can  scarcely  be  doubted,"  says  he,  "that 
parties,  having  a  dispute,  would  generally  act  with  pru- 
dence in  selecting  one  or  more  mercantile  men  of  ex- 
perience, firmness,  and  impartiality  to  arbitrate  between 
them."  This  is  especially  true  where  the  services  of  ex- 
perts are  required.  "In  a  public  court,"  says  he,  "the 
judge  or  the  jury  would  probably  require  the  aid  of  such 
men,  before  disposing  of  cases  like  these."  Why  not  let 
them  be  the  arbiters?  Then  again,  disputes  which  "turn 
on  the  opinion  or  professional  knoM'ledge  of  a  practical 
engineer,  a  practical  shipwright,  an  architect" — all  of  these 
cases  make  for  the  large  and  daily  increasing  group  which 
fall  under  arbitration.  "Besides,  there  are  whole  classes 
of  cases  in  which,  from  special  circumstances — such  as  the 
near  relationship  of  the  antagonists,  or  the  intimate  con- 
fidence which  has  at  one  time  subsisted  between  them,  or 
the   indelicate  nature   of  the   investigation  which  is  in- 

its  civil  an<l  tnereantile  transactions  no  other  form  of  tribunal.] 
(Boucher's  introductory  " Kecherches,"  etc.,  prefixed  to  his  French 
translation  of  II  Consolato  del  Mare.     Paris,  1808.     T.  T,  p.  3.) 

•  Bell,  p.  2. 

» Ibid. 


PUBLIC  POLICY  27 

volved,  etc. — it  is  best  in  every  respect  that  the  controversy 
should  be  conducted  and  decided  before  a  private  tri- 
bunal. "^"^  And  in  addition,  he  gives  another  important 
reason  for  the  general  acceptation  of  arbitration  as  a  means 
of  disposing  of  mercantile  disputes  in  the  delays  and  ex- 
penses incidental  to  procedure  in  court  which  are  "unfor- 
tunately proverbial." 

Among  the  Romans,  the  employment  of  arbitrators  ad 
finiendas  lites  largely  obtained  from  an  early  period.  This 
appears  not  only  from  the  mention  made  of  arbiters  in  the: 
law  of  the  twelve  tables  and  in  various  works,  particularly 
Cicero 's,  but  still  more  from  the  number  of  practical  topics 
in  arbitration  law  which  are  treated  of  in  that  title  of 
the  Pandex  which  covers  the  subject."  In  France  from 
an  early  period  questions  arising  out  of  marine  insurance 
contracts  and  questions  arising  out  of  partnership  con- 
tracts were  submitted  to  arbitration.  By  the  royal  Or- 
donnance  (1673),  Title  IV,  Art.  9,  it  was  required  that  in 
every  contract  of  copartnership  there  should  be  inserted 
a  provision  for  the  submission  of  certain  classes  of  ques- 
tions that  might  arise  between  the  partners  to  the  de- 
termination of  arbitrators,  and  where  this  clause  might 
have  been  omitted  from  any  such  contract  the  law  implied 
or  supplied  such  a  provision.  Furthermore,  in  order  that 
submissions  might  not  be  avoided  in  certain  classes  of 
cases  it  was  provided  that  if  the  parties  were  to  name 
arbitrators  and  one  of  them  failed  to  name  an  arbitrator, 
either  at  the  outset  or  subsequently  because  of  the  death 
of  an  arbitrator  before  the  close  of  a  submission,  the 
court  was  to  name  an  arbitrator  in  the  place  of  the  party 
so  failing.  In  the  modern  Code  de  Procedure  Civil,  an 
entire  title  is  appropriated  to  the  careful  regulation  of  pro- 
cedure in  arbitration.     In  Scotland  in  1695,  Articles  of 

^Tbid.,  p.  3. 

"  Ibid.,  jj.  6.  [Lib.  4,  T.  8.  De  receptis,  qui  arbitrium  receperunt, 
ut  sententiam  dicant.] 


88  COMMERCIAL  ARBITRATION 

RegTilation  were  passed,  in  which  appears  the  following 
recital : 

"That,  for  the  cutting  off  of  groundless  and  expensive 
pleas  and  processes  in  time  coming,  the  Lords  of  Session 
sustain  no  reduction  of  any  decreet-arbitral  that  shall  be 
pronounced,  hereafter  upon  a  Subscribed  Submission,  at 
the  instance  of  either  of  the  parties-submitters,  upon  any 
cause  or  reason  whatsoever,  unless  that  of  corruption,  bri- 
bery, or  falsehood,  to  be  alleged  against  the  judges-arbi- 
trators who  pronounced  the  same."  ^-  It  was  this  act  that 
in  Scotland,  as  Bell  teUs  us,  "truly  did  little  or  nothing 
else  than  to  restore  the  Contract  of  Submission  to  its  na- 
tive force  and  vigour,  and  to  secure  for  an  arbiter's  award 
that  degree  of  conclusive  finality,  which  it  was  the  very 
object  of  both  parties  to  confer  upon  it,  when  they  orig- 
inally entered  into  the  contract. ' '  ^^ 

In  Denmark  courts  of  arbitration  or  conciliation  were 
established  about  1795  and  are  said  to  have  been  attended 
with  extraordinarily  beneficial  effects.^*  In  towns  other 
than  Copenhagen,  "the  chief  magistrate  proposes  five  or  six 
of  the  more  respectable  citizens  for  arbitrators,  of  whom 
the  commonalty  of  the  town  elect  two.  .  .  .  All  matters  of 
civil  litigation  may  be  referred  to  these  official  arbitrators. 
...  It  appears  that  .  .  .  the  arbitrators  in  these  tribu- 
nals have  no  power  to  compel  the  parties  to  settle  their 
differences  .  .  .  they  are  at  liberty  to  discuss  their  respect- 
ive rights  in  the  ordinary  courts  of  justice.  It  is  neces- 
sary, however,  that  before  a  suitor  commences  an  action 
in  the  superior  courts,  he  should  prove  that  he  has  already 
applied  to  one  of  the  courts  of  conciliation.  These  courts 
.  .  .  were  .  .  .  multiplied  rapidly  in  Denmark  and  Nor- 
way, and  are  said  to  have  produced  an  astonishing  decrease 
in  the  amount  of  contentious  litigation.    (See  Tableau  des 

"BeU,  p.  13. 

Tbid.,  p.  14. 

""Penny  Cyclopedia,"  Vol.  II,  p.  253. 


PUBLIC  POLICY  29 

£ltats  Danois,  par  Catteau,  tome  1,  p.  296.)  "  ^'^  J.  F,  Areh- 
bold  on  Arbitration  and  Award  writes:  "The  expense  of 
an  action  or  bill  in  equity,  in  comparison  with  the  moder- 
ate expense  of  an  arbitration,  would  in  ordinary  cases  in- 
duce parties  about  to  be  involved  in  litigation  to  choose 
the  latter,  if  they  can  a^-ee  upon  the  appointmeniL  of  an 
arbitrator  well  versed  in  the  law  or  equity  applicE^e  to 
the  case,  and  upon  whose  honour  they  may  depend  th^t  he 
wiU  act  impartially  as  a  judge  between  them,  and  not  as 
the  partisan  of  either. "^^  Kyd  says:^^  "A  conviction  of 
the  good  policy  of  encouraging  these  domestic  tribunals,  has 
induced  those  who  have  presided  over  the  formation  of 
the  civil  code,  to  lend  them  their  assistance  to  enforce 
obedience  to  their  decrees."  Writing  in  95  Lmv  Times, 
524-528  (Oct.  14,  1893),  H.  Bentwitch  says  that  during 
the  whole  existence  of  the  Hebrew  state  in  Biblical  times 
"and  even  later  on,  during  the  period  of  exile,  a  system 
of  arbitration  was  the  sole  mode  adopted  for  the  settle- 
ment of  private  disputes,  the  Beth  Din  (a  chamber  of 
arbitration,  consisting  of  any  three  persons  learned  in 
the  law)  having  cognisance  of,  and  the  right  to  decide, 
all  such  cases.  It  was,"  says  Bentwitch,  "indeed,  a 
maxim  that  no  man  should  be  encouraged  or  assisted  to 
litigate.  ..."  Bentwitch  writes:  "In  the  older  Roman 
law  there  was  no  complete  remedy  for  non-performance 
of  the  award,  unless  the  parties  bound  themselves  recipro- 
cally either  to  perform  what  should  be  awarded  or  to  incur 
the  forfeiture  of  a  sum  of  money  or  of  some  other  specific 
thing.  This,  however,  was  remedied  by  Justinian,  who 
enacted  that,  whether  the  submission  was  under  a  penalty 
or  not,  there  should  be  no  appeal  after  a  lapse  of  ten  days 
from  the  judgment,  and  each  party  should  then  have  a 
remedy  against  the  other  based  on  the  judgment  in  case 

"IJtU,  pp.  253-4. 

"Preface,  p.  v. 

""A  Treatise  on  the  Law  of  Awards,"  by  Stewart  Kyd,  pp.  3,  4. 


30  COMMERCLAL  ARBITRATION 

of  non-perforraanee.  And  the  same  emperor  euacted  that 
where  the  submission  was  accompanied  by  an  oath  to  stand 
to  the  award,  or  the  arbitrator,  by  the  consent  of  the 
parties,  bound  himself  bj^  an  oath  to  end  the  dispute  with 
all  regard  to  truth,  both  parties  should  be  absolutely 
bound. "  ^®  In  Ireland,  Bentwitch  tells  us,  forty  of  the  most 
eminent  merchants  in  Dublin  conducted  a  tribunal  which 
flourished  for  nearly  two  centuries,  called  the  "Ouzel  Gal- 
ley Arbitration  Society."  All  disputants  were  at  liberty 
to  select  any  arbitrators  they  chose  from  the  list  of  the 
merchants.  It  was  founded  in  1700  and  "only  ceased  to 
exist  within  the  last  five  years"  (that  is,  1888).^°  In  1785, 
in  Edinburgh,  a  chamber  of  commerce  was  inaugurated. 
Before  it  had  been  long  established,  it  had  become  gen- 
erally recognized  as  a  tribunal  of  commerce  for  the  set- 
tlement of  disputes  between  traders.^^  In  France,  from 
the  time  of  St.  Louis  (1250)  "registers  of  the  persons 
engaged  in  different  businesses  were  formed  to  'expedite 
and  conclude  pleas,'  and  merchants  had  their  own  special 
judges  in  the  quarters  where  commercial  transactions  were 
most  frequent. ' '  ^^  The  ' '  Assembly  of  Notables, ' '  founded 
in  1560,  was  made  up  of  the  foremost  citizens  of  France 
and  was  the  parent  of  the  present  Tribunal  de  Commerce. 
In  1883  it  became  the  Tribunal  de  Commerce.  "Side  by 
side  with  this  institution  have  grown  up  the  Conseils  de 
Prndliommes,  the  first  of  which  was  established  in  1452." 
Its  function  is  to  settle  disputes  between  employers  and 
employed  and  to  settle  strikes  generally.  The  Tribunal 
de  Commerce  is  made  up  not  of  professional  judges,  but 
of  merchants,  elected  for  a  limited  time  by  the  vote  of 
their  fellows:  "this  election  being  regarded  as  equivalent 
to  the  choice  of  an  arbitrator  for  business  disputes."^" 
Similar  tribunals  have  been  formed  in  Italy  and  Spain. 

"95  Law  Times  524-525. 
"/bid.,  p.  525. 
""Ibid.,  p.  527. 


PUBLIC  POLICY  31 

"In  Holland  there  appears  to  be  at  present  no  Court  of 
Arbitration  for  ordinary  trade  disputes,  but  boards  of  a 
very  special  nature  have  been  formed  for  settling  differ- 
ences arising  (1)  in  shipping  business,  (2)  in  general 
average  cases,  (3)  in  salvage  and  collision  cases. "-^  In 
Austria-Hungary  for  more  than  a  century  past  arbitra- 
tion as  a  means  of  settlement  of  disputes  has  been  recog- 
nized and  encouraged  and  in  1868  "the  right  was  granted 
to  the  Chambers  of  Commerce  and  Industry  ...  to  or- 
ganise permanent  Courts  of  Arbitration  for  the  decision 
of  disputes  arising  out  of  commercial  or  industrial  trans- 
actions. Although  there  is  no  law  compelling  disputants 
to  apply  to  these  courts  in  their  disputes;  still  .  .  .  the 
vast  proportion  of  commercial  difficulties  are  so  set- 
tled. "- 

In  the  New  York  Public  Library  there  appears  an  old 
book  (1779)  by  Champlair  entitled  L'Ami  de  la  Concorde, 
ou  Essai,  Par  un  Avocat  au  Parlentenf.  (The  Friend  of 
Peace.  An  Essay  by  an  Advocate  in  Parliament.)  The 
frontispiece  of  the  book  is  a  very  sharp  and  more  or  less 
cynical  criticism  of  the  process  of  administering  justice 
in  the  courts.    There  appears  the  following: 

"La  Justice  pesant  ce  droit  litigieux 
Demande  I'Huitre,  I'ouvre  et  I'avalle  a  leurs  yeux, 
Et  par  ce  bel  arret  tei-minant  la  bataille, 
Tenes,  voila,  dit  elle,  a  chacun  ime  Ecaille 
Des  sotises  d'Autrui  nous  vivons  au  Palais 
Messieurs  I'Huitre  etoit  bonne,  alles  vives  en  paix."23 

This  lawyer  expresses  the  opinion  that  in  legal  con- 
flict he  himself  had  never  been  able  to  secure  such  com- 
plete satisfaction  in  winning  a  law  suit  as  he  found  in  set- 

« Ibid.,  p.  525. 

'^Ibid.,  p.  526. 

*^  Justice,  weighing  the  rights  of  the  litigants,  demands  the  oyster 
which  is  the  subject  of  controversy  between  tliem,  opens  it  before 
their  eyes,  swallows  the  contents,  and  delivers  to  each  of  the  parties 


32  COM]MERCIAL  ARBITRATION 

tling  the  controversy.  ^'La  glolrc  de  gagner  des  proces 
m'a  tou jours  moins  flatte  que  la  dowce  satisfaction  de  les 
prevenir,  ou  de  les  accommoder.  J'ai  remarque  que  de  tous 
les  moyens  que  j'ai  employes  p&ur  persuader  a  ceux  qui 
se  sont  adresse  a  moi,  de  preftrer  la  conciliaiion  ou  I'ar- 
hitrage,  a  ce  qu'on  appelle  les  v&ies  de  la  Justice."  ^*  In  the 
first  part  of  the  book  he  presents  in  extenso  the  difficulties 
of  securing  justice  in  the  courts,  and  in  the  second  part 
points  out  how  much  more  effectively,  in  many  cases, 
justice  may  be  secured  by  arbitration.  Another  writer, 
A.  Charmolu,  treats  of  La  Justice  Gratuite  et  Eapide  par 
I'Arhitrage  Amiable  (Speedy  and  Inexpensive  Justice  by 
Peaceful  Arbitration).  This  writer  reviews  the  history  of 
arbitration  in  organized  society  from  the  earliest  times 
and  concludes  that  it  is  an  old  and  well-tried  institution 
and  method  for  obtaining  justice.  He  traces  the  history 
of  arbitration  in  France  and  points  out  that,  as  early 
as  1363,  oi*dinances  were  passed  in  France,  Eind  later  in 
1560,  1673  and  1681,  facilitating  the  disposition  of  or- 
dinary controversy  ''dans  le  cas  de  contestations  entre 
mm'chands  et  associes  commerciaux,  ainsi  que  pour  les 
demandes  de  partage  et  de  com.pt es  de  tutelle."  ^^  This 
writer  informs  us  that  on  the  13th  of  July  in  each  year 
in  the  highlands  of  the  Pyrenees,  on  the  border  line  be- 
tween France  and  Spain,  the  peasants  come  together  and 
dispose  of  all  the  controversies  that  have  arisen  during 
the  year,  with  the  aid  of  the  Alcalde  of  Isaba  (a  Spanish 

an  empty  shell.  "Behold,"  she  says.  "For  each  a  shell.  Upon 
the  folly  of  others  we  live  in  the  palace.  Gentlemen,  the  oyster  waa 
good.     Depart  in  peace." 

**  The  glory  of  winning  cases  has  always  pleased  me  less  than 
the  quiet  satisfaction  of  preventing  them  or  of  settling  them.  I 
have  remarked  that  of  all  the  methods  that  I  have  employed  to 
persuade  those  who  have  appealed  to  me,  conciliation  or  arbitration 
was  preferable  to  those  that  one  describes  as  the  paths  of  justice. 

"^  "  L'ecrivain  Jean  Larocque,  en  compulsant  d'ancicns  documents, 
a  compte  jusqu'd  treize  juridictums  appeh'es  d  srtaU/cr  dans  v/tm 
affaire  qui  se  ploAda  e'li  France  et  fut  abandunnee  an  bout  de  cent 
cinquanle  ans  .  .  .  faule  d'unc  solution  possible." 


PUBLIC  POLICY  33 

official  who  acts  as  official  arbitrator).-*'  The  practice  in 
these  cases  is  for  the  judge  to  listen  to  the  tale  of  both 
parties  and  then  pronounce  judgment  without  delay  and 
without  technicality,  and  he  points  out  that  since  St.  Louis 
of  France  and  Alphonse  the  Wise  of  Spain  this  practice 
has  continued  and  the  native  peasants  observe  the  awards 
made  by  the  arbitrator  with  more  faithfulness  than  they 
abide  by  the  decisions  of  the  courts.  Another  French  author, 
writing  on  the  subject  of  arbitration  {Trait e  General  dc 
r Arbitrage  en  Matiere  Civile  et  Commerciale  by  M.  Gou- 
be?  u  de  la  Bilennerie)  reviews  the  very  early  history  of 
arbitration  in  France  and  traces  it  back  to  its  origins  in 
Rome.  He  shows  how  simple  and  complete  were  the  dis- 
positions of  controversy  from  the  time  of  Francis  the  Sec- 

^"Nov,s  pourrioTis  citer,  comme  exemple,  ce  fait  qui  se  renou- 
velle  chaque  annee,  le  13  juillet  dans  le  highland  pyreneen.  Ce 
jour-ld  apres  des  ceremonies  qui  reunissent  les  paysans  espagnols 
et  les  habitants  franqais  de  la  vallee  de  Barretous,  I'alcade  d'Isaba, 
tel  qu'accutumaient  les  anciens  rois  de  jadis,  saint  Louis  de  France 
et  Alphonse  le  sage  d'Espagne,  s'installe  sur  un  siege  forme  par 
les  racines  notieuses  d'un  chene  et  se  met  a  rendre  la  justice. 
Pasteurs  et  proprietaires  de  bestiaux  franqais  et  espagnols  arrivent 
en  grand  nombre  ef  exposent  leurs  litiges  en  quelques  mots. 

"Le  jtige  ecoute  avec  attention  les  deux  parties,  interroge  les 
temoins  et  prononce  le  jugement  sans  delai,  imposant  a  I'un  una 
amende,  accordant  a  1 'autre  une  indemnite,  donuant  a  celui-ci  une 
eatisfaction,  a  celui-la  une  punition,  suivant  les  cas. 

*'Ces  jugements  inspirent  aux  rudes  montagnards  plus  de  respect 
que  les  decisions  de  la  Cour  supreme,  et  tout  le  monde  s'y  soumet 
sans  murmurer. " 

(We  could  cite,  as  an  example,  the  festival  which  is  revived  every 
year  on  the  13th  of  July  in  the  highlands  of  the  Pyrenees.  On  that 
day,  after  ceremonies  which  unite  the  Spanish  peasants  and  the 
French  inhabitants  of  the  Barretous  valley,  the  alcalde  of  Isaba, 
just  as  did  the  ancient  kings  of  former  times,  St.  Louis  of  France 
and  Alphonso  the  Wise  of  Spain,  presides  upon  a  seat  formed  by  the 
knotty  roots  of  an  oak  and  proceeds  to  render  justice.  French  and 
Spanish  farmers  and  herdsmen  arrive  in  great  numbers  and  present 
their  grievances  in  a  few  words.  The  judge  listens  attentively  to  the 
two  pa,rtieB,  interrogates  the  witnesses  and  pronounces  judgment 
without  delay,  imposing  upon  one  a  fine,  upon  the  other  an  indem- 
nity, giving  to  this  one  satisfaction,  to  the  other  punishment,  aa 
the  case  may  be.  These  judgments  inspire  more  respect  in  the 
rude  mountaineers  than  the  decisions  of  the  Supreme  Court,  and 
everyone  submits  to  them  without  grumbling.) 


34  COMMERCIAL  ARBITRATION 

ond  (1560),  and  how  from  time  to  time  the  machinery  was 
improved  upon.  Another  writer,  F.  Rigaud,  in  the  Ency- 
clopedic Scicniifique  dcs  Aide-Mcmoire,  treating  of  "Ex- 
periises  et  Arbitrages,"  says:  "L'arhitrage  a  une  portee 
plus  etenduc:  il  a  son  origine  dans  la  liberie  fondamcntale, 
dans  le  droit  de  compromettre  sur  tons  interits,  droit  ap- 
partenaiii  en  principe  a  taiite  personne  jouissa/iit  de  sa 
liberte  enticre  .  .  ."  -^ 

If  America  is  to  have  international  relations  after  the 
war,  it  may  be  of  no  little  value  to  point  out  at  this  time 
that  France,  which  elicits  our  warm  admiration  for  its 
respect  of  liberty  and  law,  for  many  centuries  harbored 
the  arbitration  of  mercantile  disputes  and  treated  the  right 
to  resort  to  arbitration  as  a  personal  right — part  of  the 
right  of  liberty  itself. 

Banister  Fletcher,  writing  of ' '  Arbitrations, ' '  says : ' '  The 
present  might,  I  think,  with  great  propriety,  be  termed 
'the  Age  of  Arbitration.'  The  recommendations  of  the 
principle  are  such  that  we  find  it  every  day  more  gen- 
erally adopted  as  the  means  of  settlement  of  eveiy  class 
of  difference,  from  the  'burning  questions'  of  international 
importance,  to  the  dispute  as  to  the  half-penny  per  hour, 
more  or  less,  in  the  wages  of  the  artisan,"-^  This  writer 
confesses  he  cannot  comprehend  the  rule  that  "neither  at 
law  nor  in  equity  could  the  fact  that  an  arbitration  was 
pending  be  pleaded  as  a  bar  to  an  action  or  suit  for  the 
same  demand."-^  Writing  in  his  "Handbook  of  Aver- 
age," Manley  Hopkins  (1884)  says  that  since  there  is 
a  claim  made  upon  one  policy  in  five,  considering  all 
of  the  trades,  "a  constant  recourse  to  law  would  be  most 
undesirable,"  and  consequently  there  is  a  resort  to  ar- 
bitration.     He    points   out:    "There   is  something   quite 

"  Arbitration  has  a  more  extensive  field ;  it  has  its  origin  in 
basic  Jiberty,  in  the  rijjht  to  compromise  all  cases,  a  right  belonging 
in  principle  to  each  person  enjoying  complete  liberty. 

=«'2nd   Ed.,   p.   1. 

'»Ibid.,  p.  4. 


PUBLIC  POLICY  35 

consistent  with  friendly  feeling  in  offering  to  leave  to 
another's  decision  the  opposing  views  which  two  persons 
entertain  upon  a  difficult  subject.  And  when,"  he  says, 
"it  is  borne  in  mind  how  seldom  questions  arising  out  of 
the  transactions  we  have  been  considering  are  pure  and 
simple,  or  resolve  themselves  into  the  mere  form  of  'yes' 
or  'no,'  but,  on  the  other  hand,  how  often  small  equitable 
rights  are  found  on  both  sides  and  accessory  matters  are 
discovered,  which  have  to  be  discussed  pro  and  con,  and 
all  bring  in  their  weight,  it  is  not  wonderful  that  arbi- 
tration has  been  a  favorite  resource,  and  has  been  a  valu- 
able reconciling  medium  between  men  of  business. ' '  ^°  Thus, 
in  the  insurance  world,  he  finds  it  is  a  matter  of  habit 
to  leave  matters  to  arbitration. 

In  Persia  various  questions  of  contracts,  titles  to  land, 
property,  even  questions  of  disputed  wills,  intestate  suc- 
cession, the  boundaries  or  shares  of  land,  recoveries  of 
debts  in  bankruptcy  have  for  many  centuries  been  sub- 
mitted to  arbitration.  A  mejilis,  or  informal  council,  is 
convoked  in  the  house  of  a  mullah  or  leading  citizen.  Both 
sides  state  their  case.  The  documents  are  produced  and 
inspected  and  a  decision  is  given.  It  is  signed  and  regis- 
tered by  the  Sheikh-el-Islam  or  the  Imam-i-Jama  (the  Chief 
Priest)  and  "with  a  little  present  to  the  jury  all  round, 
the  appellants  conclude  what  is  probably  one  of  the  cheap- 
est and  most  effective  forms  of  legal  procedure  in  the 
world. ' '  There  is  provision,  however,  for  appeal.  If  either 
party  is  dissatisfied  with  the  sentence,  he  may  appeal  to 
the  local  governor.^^  In  Japan,  during  the  Tokugawa 
Era  (seventeenth  century),  arbitration  and  compromise  be- 
came the  rule,  litigation  the  exception,  A  dispute  arising, 
parties  would  submit  it  in  the  fii'st  instance  to  the  members 
of  the  "five-men  group,  or  groups  to  which  they  belonged. 

""Pp.  526-527. 

*^Se6  "Persia"  by  Hon.  George  N.  Curzon,  M.  P.,  1892.  Vol. 
I,  pp.  455-6. 


36  COMMERCIAL  ARBITRATION 

These  met  in  conclave,  the  disputants  being  present."  To 
promote  a  friendly  spirit,  food  and  wine  would  be  served. 
Rarely,  if  ever,  did  the  judgment  of  the  group  fail  to 
satisfy  the  disputants  or  at  any  rate  to  placate  them. 
The  custom  goes  back  to  the  remotest  times  of  antiquity.^^ 
In  "Miscellaneous  Essaj^s  Relating  to  Indian  Subjects," 
B.  II.  Hodgson,  F.  R.  S.,  gives  us  an  account  of  the  system 
of  Arbitration  in  the  State  of  Nepal.  "There  are  no  per- 
manent individual  members  of  the  Panclidyet.  ...  In  mat- 
ters affecting  persons  who  are  neither  Parbattias  nor 
Newdrs  (different  tribes),  there  is  no  restriction  as  to  the 
selection  of  the  ponc/t-men  by  the  respective  par- 
ties. "^^  "Persons  who  sit  on  Fanchdyets  are  never  paid 
any  sum,  either  as  compensation  for  travelling  expenses, 
loss  of  time,  or  on  any  other  account  whatsoever."  ^^  "No 
man  can  sit  on  a  Panchdyet  without  the  consent  of  both 
parties."  ^*  "With  the  exception  of  cases  of  life  destroyed, 
all  matters  may  be  referred  to  a  Panchdyet,  at  the  desire 
of  the  parties  .  .  ."  ^^  ".  .  .  the  judge  (of  the  Sadr  court) 
takes  from  the  parties  an  obligation  to  abide  by  the  award 
of  the  Panchdyef^'  and  when  given,  it  "is  referred  to  the 
court  to  be  carried  into  effect. "  ^®  "  The  value  of  entries 
in  merchants'  books,  and  in  general  mercantile  affairs, 
are  referred  by  the  court  to  a  Panchdyet  oi  merchants."  ^^ 
The  Grecian  law  provided:  "The  public  arbitrators  .  .  . 
were  a  body  including  all  Athenian  citizens  in  the  sixtieth 
year  of  their  age.  The  arbitrator,  on  receiving  the  case 
from  the  four  representatives  of  the  Forty,  first  endeav- 
ored to  bring  the  parties  to  an  agreement.  If  this  failed, 
he  heard  the  evidence  and  gave  a  decision. 

'"".Japan — Tta    History,    Arts    and    Literature,"    bj    Captain    P. 
Brinkley.     Vol.  IV,  pp.  102-4. 
"  Sect.  XTI,  Vol.  II,  p.  218. 
**Ihid.,  p.  217. 
^Ibid.,  p.  216. 
''Ibid.,  p.  217. 
^Ibid.,  p.  227. 


PUBLIC  POLICY  37 

"The  Forty,  who  were  appointed  by  lot,  four  for  each 
of  the  ten  tribes,  acted  as  sole  judges  in  petty  cases  where 
the  damages  claimed  did  not  exceed  ten  drachmas.  Claims 
beyond  that  amount  they  handed  over  to  the  arbitrators 
...  to  a  public  arbitrator  appointed  by  lot. ' '  ^^  Arbi- 
tration exists  also  in  the  following  countries:  China,^® 
Belgium,  the  Netherlands,  Germany,  Italy,  Spain,  Sweden 
and  Norway,  and  Portugal.*" 

"In  Scotland  the  words  'submission'  and  'arbitration' 
are  synonymous. ' '  *^  And  it  has  always  been  held  in  Scot- 
land that  a  submission  implies  a  contract  and  that,  there- 
fore, it  is  irrevocable  except  by  consent  of  all  of  the  parties 
thereto.*-  Billing,  an  English  writer,  treating  of  the  sub- 
ject of  the  "Law  of  Awards"  (1846),  says:  "Arbitration 
when  resorted  to  on  proper  occasions  ...  is  of  inestimable 
value, ' '  quoting  Denman,  C.  J.,  in  Scott  v.  Van  Sandeau,  1 
Q.  B.  109a,  1  Adolphus  &  Ellis  Reports  (N.  S.)  456,  and 
from  Mr.  Justice  Coleridge.*^  In  Scotland  an  agreement  to 
refer  future  disputes  is  good  even  though  the  disputes  or 

^  Encyclopaedia  Britannica,  11th  Ed.,  Vol.  XII,  p.  504. 

^Ubid.,  Vol.  VI,  p.  184. 

*°IMd.,  Vol.  II,  p.  327. 

^ ' '  The  Law  of  Arbitration  in  Scotland, ' '  by  Wood  and  Mae- 
phail,  p.  1. 

*^ Ibid.,  p.  1;  "Law  of  Arbitration,"  by  J.  Parker  (1845),  pp. 
23-24. 

*^3  Bl.  Com.,  p.  17,  note  14,  by  Coleridge,  J.  "Excellent  aa 
trial  by  jury  undoubtedly  is  as  a  means  of  investigating  the  truth, 
yet  there  are  cases  to  which,  for  various  reasons,  it  is  not  appli- 
cable. Thus  when  long  and  complicated  accounts  are  to  be  ex- 
amined, it  can  hardly  be  expected  that  twelve  men  placed  at 
hazard  in  the  jury-box  should  be  able  to  determine  very  accurately 
upon  the  allowance  of  particular  items,  or  to  strike  a  nice  balance 
between  the  contending  demands.  Again,  it  will  often  happen  that 
two  persons  lay  claim  to  the  whole  of  the  same  thing  as  a  matter 
of  mere  right,  which,  under  proper  regulations,  might  very  well 
suffice  for  both,  and  of  which  it  might  be  ruinous  to  either  to  be 
wholly  deprived,  as  a  stream  of  water,  yet  in  such  case  the  verdict 
of  the  jury  can  only  determine  to  whom  the  right  belongs,  it  cannot 
look  to  the  consequences  nor  make  a  beneficial  division  of  the  use 
between  both.  In  this  way  (arbitration)  the  parties  have  the  benefit 
of  a  more  deliberate  investigation;  if  the  matter  be  of  a  scientific 
nature,  or  removed  from  the  common  information  of  men,  they  may 


O  \^  i>j  f 


<•.) 


'38  COMMERCIAL  ARBITRATION 

differences  which,  are  to  form  the  subject  of  the  reference 
are  future  or  contingent.**  Morse,  writing  ''On  Arbitra- 
tion and  Award,"  says:  "The  tendency  among  business 
men  to  avoid  the  public  tribunals  and  to  settle  their  dis- 
putes by  arbitration  before  individuals  of  their  own  choos- 
ing is  growing  stronger  year  by  year.  Not  unnaturally  they 
feel  that  they  can  obtain  a  more  intelligent  and  satisfac- 
tory, as  well  as  a  more  prompt,  determination  from  eminent 
lawyers  or  merchants  whom  they  select,  and  in  whom  they 
feel  confidence,  than  they  can  venture  to  expect  from  an 
average  jury."*^ 

select  some  one  to  decide  it  whose  habits  have  made  him  conversant 
with  it,  and  by  investing  him  with  more  or  less  power,  they  may 
have  a  decision  more  single  and  unbending  than  that  of  the  law, 
prospective  in  its  operations,  and  limiting  in  detail  the  future  exer- 
cise of  disputed  rights."  (This  note  cannot  be  found  in  the  Ameri- 
can editions,  but  is  given  as  quoted  by  Billing,  p.  16  and  17.) 

**  Irons  and  Melville:  "Law  of  Arbitration  in  Scotland,"  p.  58, 
citing  McCaul  v.  MonMand  Bailway  Co.,  9  Sessions  Cases,  1st  Series 
522.  - 

**  Preface,  p.  iii. 


CHAPTER  IV 

THE  JUDICIAL  RULE  OF  STARE  DECISIS 

Charles  Macklin  once  said :  ' '  The  law  is  a  sort  of  ho- 
cus-pocus science,  that  smiles  in  yer  face  while  it  picks 
yer  pocket;  and  the  glorious  uncertainty  of  it  is  of  mair 
use  to  the  professors  than  the  justice  of  it."  In  his 
preface  to  "The  Compleat  Arbitrator:  or  the  Law  of 
Awards"  (1770),  Matthew  Bacon  wrote,  "It  is  one  of  the 
greatest  Objections  to  our  Laws,  that  the  Way  to  the 
Knowledge  of  them  is  so  dark  and  rugged,  so  full  of 
"Windings  and  Turnings,  that  the  most  Knowing  very  often 
find  it  difficult  to  be  able  to  pronounce  with  Certainty, 
concerning  some  Points  they  are  sollicitous  about."  The 
uncertainty  in  the  law,  as  well  as  its  expense,  is  the  mer- 
chant's dread.  He  wants  to  have  his  lawyer  tell  him  the 
law  of  the  case  with  exactitude  and  definitiveness.  To  do 
so,  his  lawyer  reads  the  reports  of  the  courts'  decisions. 
If  there  are  conflicting,  uncertain,  unstable  decisions,  how 
can  he  give  his  client  exact  or  definite  information  upon 
the  state  of  the  law?  The  law  of  the  merchant  must  be 
"staple" — as  the  old  English  statutes  put  it.  This  is 
the  radson  d'etre  of  the  rule  of  stare  decisis,  or,  literally, 
"to  stand  upon  decisions."  But  it  has  been  argued  by  good 
lawyers  that  this  duty  to  stand  upon  decisions  requires 
repetition  of  error,  that  reiteration  of  error  makes  truth. 
Such  sophistry  brings  ridicule  and  contempt  upon  the 
law. 

The  modern  tendency  is  for  courts  to  correct  judicial 
error.  In  a  recent  article  entitled  "Judicial  Correction 
of  Judicial  Errors,"  Everett  V,  Abbot  says — 

39 


40  COMIMERCIAL  ARBITRATION 

*'0f  all  methods  of  correcting  judicial  errors,  the  ju- 
dicial method  is  obviously  the  wisest,  the  most  effective, 
and  the  most  just.  The  mere  fact  that  there  has  been  error 
signifies  that  there  has  been  injustice  and  the  courts  are 
better  fitted  to  cope  with  injustice  than  any  other  de- 
partment of  an  organized  state.  Our  courts  should  al- 
ways be  ready,  therefore,  to  apply  to  their  own  errors 
and  injustices  the  judicial  method  of  correction.  A  frank 
acknowledgment  that  they  can  be,  and  are,  on  occasion,  mis- 
taken, and  an  open-minded  reception  of  lawyer-like  and 
respectful  arguments  tending  to  point  out  errors,  will  not 
in  the  slightest  degree  undermine  their  authority,  or  di- 
minish the  respect  in  which  they  are  held.  On  the  con- 
trary, the  more  tolerant  and  approachable  the  court  is, 
the  greater  will  be  the  popular  confidence  in  its  decisions. 
In  fact,  the  strongest  bulwark  v/hich  the  courts  can  erect 
against  the  recall  and  other  insidious  attacks  upon  our 
judicial  system  will  be  found  in  the  recognized  practice 
by  the  courts  themselves  of  the  principle  that  judicial 
errors  are  to  be  judicially  corrected."  ^ 

Lord  Justice  Bowen  said:  "There  is  and  can  be  no 
such  thing  as  finality  about  the  administration  of  the  law. 
It  changes,  it  must  change,  it  ought  to  change,  with  the 
broadening  wants  and  requirements  of  a  growing  country, 
and  with  the  gradual  illumination  of  the  public  con- 
science." ^ 

"Cessante  ratione  legis  cessat  ipsa  lex."  (Reason  is  the 
soul  of  the  law,  and  when  the  reason  of  any  particular  law 
ceases,  so  does  the  law  itself.)  ' 

Lord  Tenterden  said :    ' '  The  rule  is  founded  on  a  prin- 

""Ydle  Law  Journal,  Vol.  26,  No.  2,  p.  104   (Dec,  1916). 

'"Progress  in  the  Administration  of  Justice  during  the  Victorian 
Period "—Cliarles  Synge  Christopher,  Baron  Bowen.  "Select  Es- 
says in  Anglo-American  Legal  History,"  Vol.  I,  p.  557. 

'Broom's  Legal  Maxims  (7th  English  Edition),  p.  126. 


STARE  DECISIS  41 

ciple  of  public  policy ;  and  where  the  public  policy  ceases 
to  operate,  the  iiile  shall  cease  also."^ 

Mr.  Justice  Holmes,  of  the  Supreme  Court  of  the  United 
States,  writing  of  "The  Common  Law,"  says:  "The  very 
considerations  which  judges  most  rarely  mention,  and  al- 
ways with  an  apology,  are  the  secret  root  from  which  the 
law  draws  all  the  juices  of  life.  I  mean,  of  course,  con- 
siderations of  what  is  expedient  for  the  community  con- 
cerned. Every  important  principle  which  is  developed  by 
litigation  is  in  fact  and  at  bottom  the  result  of  more  or  less 
definitely  understood  views  of  public  policy;  most  gen- 
erally, to  be  sure,  under  our  practice  and  traditions,  the 
unconscious  result  of  instinctive  preferences  and  inarticu- 
late convictions,  but  none  the  less  traceable  to  views  of 
public  policy  in  the  last  analysis.  And  as  the  law  is 
administered  by  able  and  experienced  men,  who  know 
too  much  to  sacrifice  good  sense  to  a  syllogism,  it  will  be 
found  that,  when  ancient  rules  maintain  themselves  in 
the  way  that  has  been  and  will  be  shown  in  this  book, 
new  reasons  more  fitted  to  the  time  have  been  found  for 
them,  and  that  they  gradually  receive  a  new  content,  and 
at  last  a  new  form,  from  the  grounds  to  which  they  have 
been  transplanted. ' '  ^  And  also :  * '  The  first  requirement 
of  a  sound  body  of  law  is,  that  it  should  correspond  with 
the  actual  feelings  and  demands  of  the  community, 
whether  right  or  wrong. ' '  ^ 

Kent,  in  his  "Commentaries,"  said:  "Considering  the 
influence  of  manners  upon  law,  and  the  force  of  opinion, 
which  is  silently  and  almost  insensibly  controlling  the 
course  of  business  and  the  practice  of  the  courts,  it  is  im- 
possible that  the  fabric  of  our  jurispnidence  should  not 

*  Stone  V.  Marsh,  6  Barnewall  and  Cresswell  55\^  at  p.  564. 

'  Oliver  Wendell  Holmes,  Jr.,  ' '  The  Common  Law, ' '  p.  35-36. 

•  Ibid.,  p.  41. 


n  COM]\IERCIAL  ARBITRATION 

exhibit  deep  traces  of  the  progress  of  society,  as  well  as 
of  the  footsteps  of  time."'' 

Mr.  Justice  Lurton  of  our  United  States  Supreme  Court, 
speaking  of  the  rigor  with  which  the  rule  of  stare  decisis 
is  to  be  applied,  said  but  recently: 

"The  Circuit  Court  of  Appeals  was  obviously  not  bound 
to  follow  its  own  prior  decision.  The  rule  of  stare  decisis, 
though  one  tending  to  consistency  and  uniformity  of  de- 
cision, is  not  inflexible.  Whether  it  shall  be  followed  or 
departed  from  is  a  question  entirely  within  the  discretion 
of  the  court,  which  is  again  called  upon  to  consider  a 
question  once  decided. ' '  ^ 

There  are  many  instances  where  the  highest  courts  in 
our  country  have  reversed  themselves,  without  reserva- 
tion. The  two  most  historical  examples  are  the  Legal  Ten- 
der Cases  ^  and  the  Income  Tax  Cases}^ 

Within  the  past  six  months  the  United  States  Supreme 
Court  refused  to  follow  the  Dick  case,  decided  only  a  few 
years  before  (March  11,  1912)." 

Shall  a  precedent  overrule  all  reason?  Lord  Ellenbor- 
ough  said:  "The  question  is,  whether  the  plaintiff's  dog 
incurred  the  penalty  of  death  for  running  after  a  hare 
in  another's  ground?  And  if  there  be  any  precedent  of 
that  sort,  which  outrages  all  reason  and  sense,  it  is  of  no 
authority  to  govern  other  cases."  ^"^ 

In  The  Genesee  Chief  v.  Fitzhugh,  12  Howard  443,  the 
United  States  Supreme  Court  held  that  the  admiralty  juris- 
diction of  the  United  States  Courts  extended  to  navigable 


'Kent's  "Commentaries,"  14th  Edition,  Vol.  I,  p.  *  479,  651. 

'Hertz  V.  Woodman,  218  U.  S.  205,  at  p.  212.     Italics  ours. 

^  Knox  V.  Lee,  12  Wall.  457,  reversing  Hepburn  v.  Grisivold,  8 
Wall.  60.3. 

^"Pollock  V.  Farmers'  Loan  and  Trust  Co.,  157  U.  S.  429,  re- 
versing Springer  v.  United  States,  102  U.  S.  586,  and  Pacific  Insur- 
ance Co.  V.  Soule,  7  Wall.  433. 

"  Motion  Picture  Patents  Co.  v.  Universal  Film  Mfg.  Co.,  243 
U.  S.  502. 

"Vere  v.  Cawdor,  11  East's  Reports  568,  at  p.  570.    Italics  ours. 


STARE  DECISIS  43 

lakes  and  rivers  connecting  them  and  was  not  limited  to 
tide  waters,  reversing  completely  the  Court's  decision  in 
The  Steam-Boat  Thomas  Jefferson,  10  Wheaton  428  (1825). 
Chief  Justice  Taney  in  the  course  of  his  opinion  writes: 

"It  is  the  decision  in  the  case  of  the  Thomas  Jefferson 
which  mainly  embarrasses  the  court  in  the  present  in- 
quiry. We  are  sensible  of  the  great  weight  to  which  it  is 
entitled.  But  at  the  same  time  we  are  convinced  that,  if 
we  follow  it,  we  follow  an  erroneous  decision  into  which 
the  court  fell,  when  the  great  importance  of  the  question 
as  it  now  presents  itself  could  not  be  foreseen;  and  the 
subject  did  not  therefore  receive  that  deliberate  considera- 
tion which  at  this  time  would  have  been  given  to  it  by 
the  eminent  men  who  presided  here  when  that  case  was 
decided.  For  the  decision  was  made  in  1825,  when  the 
commerce  on  the  rivers  of  the  west  and  on  the  lakes  was 
in  its  infancy,  and  of  little  importance,  and  but  little 
regarded  compared  with  that  of  the  present  day."^^ 

In  a  recent  case  in  the  New  York  Court  of  Appeals,  the 
Court  upheld  the  constitutionality  of  the  Bulk  Sales 
Law,^*  unequivocally  reversing  its  previous  decision  in 
Wright  v.  Hart}^  In  the  course  of  an  opinion,  with  which 
his  colleagues  unanimously  concurred.  Judge  Cardozo  said : 
"We  think  it  is  our  duty  to  hold  that  the  decision  in 
Wright  v.  Hart  is  wrong. ' '  ^*  Shortly  prior  to  this  de- 
cision, the  Court  of  Appeals  wrote :  ^'^ 

"Lastly,  it  is  urged  that  whatever  might  be  our  orig- 
inal views  concerning  this  statute,  our  decision  in  People 
V.  Williams  (189  N.  Y.  131)  is  an  adjudication  which 
ought  to  bind  us  to  the  conclusion  that  it  is  unconstitu- 
tional.   While  it  may  be  that  this  argument  is  not  without 

"P.  456.     Italics  ours. 

"L.  1909,  ch.  45,  §44,  as  amended  by  L.  1914,  ch.  507. 
"182  N.  Y.  330. 

^' Klein  v.  Maravelas,  219  N.  Y.  383. 

"  People  V.  Charles  Schweinler  Press,  214  N.  Y.  395,  at  p.  410  and 
412.     Italics  ours. 


44  COMMERCIAL  ARBITRATION 

an  apparent  and  superficial  foundation  and  ought  to  be 
fairly  met,  I  think  that  a  full  consideration  of  the  Wil- 
liams case  and  of  the  present  one  will  show  that  they 
may  be  really  and  substantially  differentiated  and  that 
we  should  not  be  and  are  not  committed  by  what  was  said 
and  decided  in  the  former  to  the  view  that  the  legis- 
lature had  no  power  to  adopt  the  present  statute. 

"The  statute  under  consideration  in  the  Williams  case, 
like  the  present  one,  prohibited  night  work  by  women 
in  factories,  and  while  its  provisions  were  somewhat  more 
drastic  than  those  of  the  present  one,  it  may  be  con- 
ceded that  these  differences  were  of  details  and  would  not 
serve  to  distinguish  that  .statute  from  the  present  one  in 
respect  of  its  constitutionality.  But  the  facts  on  which 
the  former  statute  might  rest  as  a  health  regulation  and 
the  arguments  made  to  us  in  behalf  of  its  constitution- 
ality were  far  different  than  those  in  the  present  case.  .  .  . 

"So,  as  it  seems  to  me,  in  view  of  the  incomplete 
manner  in  which  the  important  question  underlying  this 
statute — the  danger  to  women  of  night  work  in  factories 
— was  presented  to  us  in  the  WilUams  ease,  we  ought  not 
to  regard  its  decision  as  any  bar  to  a  consideration  of  the 
present  statute  in  the  light  of  all  the  facts  and  arguments 
now  presented  to  us  and  many  of  which  are  in  addition 
to  those  formerly  presented,  not  only  as  a  matter  of  mere 
presentation,  but  because  they  have  been  developed  by 
study  and  investigation  during  the  years  which  have  in- 
tervened since  the  Williams  decision  was  made.  There  is 
no  reason  why  we  should  he  reluctant  to  give  effect  to  new 
and  additional  knowledge  upon  such  a  subject  as  this  even 
if  it  did  lead  us  to  take  a  different  view  of  such  a  vastly 
important  question  as  that  of  public  health  or  disease  than 
for^nerly  prevailed." 

Judge  Sewell,  writing  the  opinion  for  the  Appellate 
Division  of  the  Supreme  Court  for  the  Third  Department 
of  New  York  State  in  Trombley  &  Ca/rrier  Co.  v.  Selig- 


STARE  DECISIS  45 

man,^^  which  reversed  a  previous  decision  in  the  same 
case  said  that  although  "When  a  question  has  been  once 
decided  the  same  parties  cannot  be  permitted  to  reopen 
the  discussion  without  great  detriment  to  the  public  inter- 
est, and  destroying  that  respect  for  the  decisions  of  courts 
which  it  is  important  should  be  maintained,"  nevertheless, 
"There  is  no  iron  rule  which  precludes  a  court  from 
correcting  a  manifest  error  in  its  former  judgment  or 
which  requires  it  to  adhere  to  an  erroneous  view  of  the 
facts  or  the  law"  and  though  the  Court  says:  "the  cases 
in  which  this  will  be  done  are  exceptional  and  the  power 
should  be  sparingly  exercised,"  it  holds  that  "It  may 
for  cogent  reasons,  reverse  or  qualify  a  prior  decision, 
even  in  the  same  case. ' '  ^® 

Judge  Page,  speaking  for  the  Appellate  Division  of 
the  First  Department  in  Kharas  v.  Collier,  Inc.,'^°  reverses 
the  decision  in  Eichner  v.  Bowery  Bank  ^^  and  says  that 
the  old  rule  that  a  corporation  was  not  liable  for  slan- 
der was  "based  upon  the  archaic  doctrine  that  a  corpora- 
tion was  an  artificial  being,  invisible,  intangible,  and  ex- 
isting only  in  the  contemplation  of  the  law"  and  since 
"This  doctrine  has  long  since  been  repudiated  by  the 
courts"  the  former  decision  (Eichner  v.  Bowery  Bank) 
"holding  the  contrary  should  be  overruled. "  ^^ 

As  this  manuscript  is  going  to  the  printer,  the  United 
States  Supreme  Court  admonishes  the  Bar  "that  the  dead 
hand  of  the  common-law  rule  of  1789  should  no  longer  be 
applied  to  such  cases  as  we  have  here, ' '  and  that  the  ques- 
tion then  before  it  must  be  examined  "in  the  light  of 
general  authority  and  of  sound  reason."  ^^ 

"  133  App.  Div.  525. 
"  ItaKcs  ours. 
"171  App.  Div.  388. 
«  24  App.  Div.  63. 
"Italics  ours. 

"  See  Bosen  v.  United  States,  Pakaa  v.  United  States.  (United 
States  Supreme  Court  Advance  Opinions,  Feb.  1,  1918,  No.  5.)     In 


46  COMiMERCIAL  ARBITRATION 

In  Gould  V.  The  Hudson  River  Railroad  Co.,  6  N.  Y. 
522  (1852),  the  Court  of  Appeals  held  that  the  owner 
of  lands  adjoining  a  navigable  river,  in  which  the  tide 

this  case,  the  Court  holds  that  a  previous  conviction  of  forgery  does 
not  disqualify  the  person  convicted  from  testifying  on  behalf  of 
the  Government  in  a  criminal  trial  in  a  Federal  court.  In  United 
States  V.  Eeid  (12  How.  361,  13  L.  ed,  1023),  decided  in  1851,  it 
had  been  held  by  the  United  States  Supreme  Court  that  the  in- 
competency of  witnesses  in  criminal  trials  in  the  Federal  courts  must 
be  determined  by  the  rules  of  evidence  which  were  in  force  in  the 
respective  States  when  the  Judiciary  Act  of  1789  M'as  passed,  and 
in  the  Rosen  and  Pakas  cases  it  was  argued  that,  as  it  appeared  by 
the  common  law  as  administered  in  New  York  that  a  person  found 
guilty  of  forgery  and  sentenced  was  thereby  rendered  incompetent 
as  a  witness  until  pardoned,  the  testimony  of  Broder,  a  witness  in 
the  case  who  had  in  fact  been  found  guilty  of  forgery  in  the  State 
court,  was  improperly  received.  The  Court  finds  that  the  decision 
in  United  States  v.  Eeid  had  never  been  specifically  overruled, 
though  its  authority  ' '  must  be  regarded  as  seriously  shaken  by  the 
decisions  in  Logan'  v.  United  States,  144  U,  S.  263-301,  36  L.  ed. 
429-442,  12  Sup.  Ct.  Rep.  617,  and  in  Benson  v.  United  States,  146 
U.  S.  325,  36  L.  ed.  991,  13  Sup.  Ct.  Rep.  60."  The  Court  says: 
"In  the  almost  twenty  years  which  have  elapsed  since  the  decision 
of  the  Benson  Case,  the  disposition  of  courts  and  of  legislative  bodies 
to  remove  disabilities  from  witnesses  has  continued,  as  that  decision 
shows  it  had  been  going  forward  before,  under  dominance  of  the 
conviction  of  our  time  that  the  truth  is  more  likely  to  be  arrived 
at  by  hearing  the  testimony  of  all  persons  of  competent  understand- 
ing who  may  seem  to  have  knowledge  of  the  facts  involved  in  a  case, 
leaving  the  credit  and  weight  of  such  testimony  to  be  determined 
by  the  jury  or  by  the  court,  rather  than  by  rejecting  witnesses  as  in- 
competent; with  the  result  that  this  principle  has  come  to  be  widely, 
almost  universally,  accepted  in  this  country  and  in  Great  Britain. 

' '  Since  the  decision  in  the  Benson  Case  we  have  significant  evi- 
dence of  the  trend  of  congressional  opinion  upon  this  subject  in  the 
removal  of  the  disability  of  witnesses  convicted  of  perjury  (Rev. 
Stat.  §5392,  Comp,  Stat.  1916,  §10,295)  by  the  enactment  of  the 
Federal  Criminal  Code  in  1909  [35  Stat,  at  L.  1088,  chap.  321,  Comp. 
Stat.  1916,  §  10,165]  with  this  provision  omitted  and  §  5392  repealed. 
ITiis  is  significant,  because  the  disability  to  testify,  of  persons  con- 
victed of  perjury,  survived  in  some  jurisdictions  much  longer  than 
many  of  the  other  common-law  disabilities,  for  the  reason  that  the 
offense  concerns  directly  the  giving  of  testimony  in  a  court  of  justice, 
and  conviction  of  it  was  accepted  as  showing  a  greater  disregard  for 
the  truth  than  it  was  thought  should  be  implied  from  a  conviction 
of  other  crime."  It  is  because  the  Court  is  "satisfied  .  .  .  that 
the  legislation  and  the  very  great  weight  of  judicial  authority  which 
have  developed  in  support  of  this  modern  rule,"  that  it  concludes 
"that  the  dead  hand  of  the  common-law  rule  of  1789  should  no 
longer  be  applied"  and,  accordingly,  reverses  the  ruling  of  the  lower 
courts. 


STARE  DECISIS  4T 

ebbs  and  flows,  has  no  private  right  or  property  in  the 
waters  of  the  river,  or  in  the  shore  between  high  and 
low  water  mark,  and  was  therefore  not  entitled  to  com- 
pensation from  a  railroad  company,  which  constructed, 
in  pursuance  of  a  grant  from  the  legislature,  a  railroad 
along  the  shore  between  the  high  and  low  water  mark, 
so  as  to  cut  off  all  communication  between  such  land  and 
the  river  otherwise  than  across  such  roads.  In  Bumsey 
V.  N.  Y.  &  N.  E.  B.  B.  Co.,  133  N.  Y.  79  (1892)  the  Court 
of  Appeals  unanimously  reversed  itself,  Judge  Denis 
O'Brien  saying,^*  "It  is  no  doubt  true  that  even  a  single 
adjudication  of  this  court,  upon  a  question  properly  be- 
fore it,  is  not  to  be  questioned  or  disregarded  except  for 
the  most  cogent  reasons,  and  then  only  in  a  case  where 
it  is  plain  that  the  judgment  was  the  result  of  a  mistaken 
view  of  the  condition  of  the  law  applicable  to  the  ques- 
tion. But  the  doctrine  of  stare  decisis,  like  almost  every 
other  legal  rule,  is  not  without  its  exceptions.  It  does  not 
apply  to  a  case  where  it  can  be  shown  that  the  law  has 
been  misunderstood  or  misapplied,  or  where  the  former 
determination  is  evidently  contrarj^  to  reason.  The  au- 
thorities are  abundant  to  show  that  in  such  cases  it  is 
the  duty  of  courts  to  re-examine  the  question.  Chancellor 
Kent,  commenting  upon  the  rule  of  stare  decisis,  said  that 
more  than  a  thousand  cases  could  then  be  pointed  out,  in  the 
English  and  American  reports,  which  had  been  overruled, 
doubted  or  limited  in  their  application.  He  added  that 
'it  is  probable  that  the  records  of  many  of  the  courts  of 
this  country  are  replete  with  hasty  and  crude  decisions; 
and  in  such  cases  ought  to  be  examined  without  fear,  and 
revised  without  reluctance,  rather  than  to  have  the  char- 
acter of  our  law  impaired,  and  the  beauty  and  harmony 
of  the  system  destroyed  by  the  perpetuity  of  error. '  "  25 

"1  Kent's  "Commentaries"  (13  Ed.)  477;  Broom's  Legal  Max- 
ims, p.  153;  Gifford  v.  Livingston,  2  Denio  392;  Morse  v.  Goold,  11 
N.  Y.  281;  Judson  v.  Gray,  id.  408. 


48  COMMERCIAL  ARBITRATION 

In  Isaacs  v.  Third  Avenue  Bcdlroad  Co.,  47  N.  Y.  122 
(1871),  the  Court  of  Appeals  had  held  that  a  carrier  was 
not  liable  for  a  willful  assault  by  a  conductor  upon  one 
of  its  passengers;  but  in  Stewart  v.  Brooklyn  and  Cross- 
town  Railroad  Co.,  90  N.  Y.  588  (1882),  the  Court  of 
Appeals  reversed  itself  and  held  just  the  contrary.  In 
his  opinion  Judge  Benjamin  F.  Tracy  said :  ^^ 

"To  sustain  the  judgment  in  this  case  the  counsel  for 
the  appellant  cites  and  relies  upon  the  case  of  Isaacs  v. 
The  Third  Avenue  B.  R.  Co.  (47  N.  Y.  122;  7  Am.  Rep. 
418).  That  case  was  discussed  by  counsel  and  determined 
by  this  court  upon  the  assumption  that  the  rule  of  the 
master's  liability  for  the  assault  of  a  servant  committed 
upon  a  person  to  whom  the  master  owed  no  duty  was  ap- 
plicable to  that  case.  The  mind  of  the  court  was  not 
called  to  the  fact  that  the  rule  applicable  to  such  a  case 
does  not  apply  to  the  case  of  an  assault  committed  upon 
a  passenger  by  a  servant  intrusted  with  the  execution  of  a 
contract  of  a  common  carrier." 

In  Meeker  v.  Wright,  76  N.  Y.  262  (1879),  the  Court 
of  Appeals  held  that  upon  a  conveyance  to  husband  and 
wife  they  held  as  tenants  in  common  and  not  as  tenants 
by  the  entirety;  and  in  Berths  v.  Nunan,  92  N.  Y.  152 
(1883)  the  Court  reversed  the  rule  and  held  that  such  a 
conveyance  created  a  tenancy  by  the  entirety.  The  Meeker 
case  was  cited  to  the  Court,  and  in  referring  to  it 
Judge  Robert  Earl  in  his  opinion  said:"  "In  that 
case  the  learned  judge  writing  the  opinion  reached  the 
conclusion  that  the  common-law  rule  governing  convey- 
ances to  husband  and  wife  had  been  abrogated  by  the 
modern  legislation  in  this  State.  But  that  portion  of 
the  opinion  was  not  concurred  in  by  a  majority  of  the 
judges.  The  views  of  that  judge  were  very  forcibly  and 
ably  expressed,  and  they  have  been  carefully  reconsidered. 

*"  At  p.  594. 
"At  p.  162. 


STARE  DECISIS  49 

They  do  not  convince  us  that  the  conclusions  he  reached 
should  be  adopted  by  this  court." 

In  Thurston  v.  Fritz,  91  Kansas  468,  the  Kansas  Supreme 
Court  reversed  State  v.  Bohan,  15  Kansas  407  and  all 
previous  decisions  and  held  the  rule  that  dying  declara- 
tions are  admissible  only  in  criminal  cases  is  without  rea- 
sonable basis  and  should  not  longer  be  followed.  The 
Court  said :  ^^ 

"We  are  confronted  with  a  restrictive  rule  of  evidence 
commendable  only  for  its  age,  its  respectability  resting 
solely  upon  a  hahit  of  judicial  recognition,  formed  with- 
out reason  and  conti7iued  ivithout  justification.  The  fact 
that  the  reason  for  a  given  rule  perished  long  ago  is  no 
ju^t  excuse  for  refusing  now  to  declare  the  rule  itself 
abrogated,  hut  rather  the  greater  justification  for  so  de- 
claring; and  if  no  reason  ever  existed,  that  fact  furnishes 
additional  justification." 

Samuel  B.  Clarke,  former  partner  of  ex-Senator  Root, 
has  written  trenchantly  upon  this  subject  of  "How  may 
judges,  practising  lawyers  and  teachers  of  law  be  made 
to  see  the  vice  of  the  illicit  preconception  and  stare  decisis 
habits  and  their  duty  to  take  thought  and  fortify  their 
wills  for  its  correction?"  In  a  series  of  pamphlets  dis- 
tributed among  some  members  of  the  Bar  and  which  are 
to  be  found  at  the  library  of  the  Association  of  the  Bar 
of  the  City  of  New  York,  he  says:  "In  this  Nation  it  is 
illegal  as  well  as  highly  immoral  doctrine  which  says 
to  the  judges  of  our  courts:  'Stick  to  your  decisions 
whether  right  or  wrong.  Be  Mind  to  your  errors.  If  the 
people  do  not  like  your  decisions  let  them  amend  their  con- 
stitutions and  statutes.'  "  He  points  out  that  just  as 
"During  the  Nineteenth  Century  physicists  shook  off  the 
stare  decisis  habit  and  approached  the  problems  of  med- 
icine and  surgery  and  mechanics  and  other  physical  science 

"At  p.  475.     Italics  ours. 


50  COMIMERCIAL  ARBITRATION 

with  unfettered  minds"  with  such  good  result  to  man- 
kind, it  is  now  "time  for  lawyers  and  judges  to  take 
thought  and  exert  their  wills  in  order  to  rid  themselves 
of  the  same  bad  habit." 

Another  writer,  Robert  Sprague  Hall,  in  the  "Illinois 
Law  Review,"  for  May,  1917,""  on  "Law  and  Logic:  A 
Study  in  Applied  Law,"  pleads  for  the  stimulation  of 
inquiry  into  the  actual  basis  of  reason  that  underlies  the 
decisions  of  our  courts  and  for  "a  thorough  study  of  such 
cases  and  an  application  of  their  methods  to  the  analysis  of 
cases  whose  decisions  have  proved  unsatisfactory  to  compe- 
tent and  fair-minded  lawyers,"  and  contends  that  "The 
popular  demand"  of  the  day  "is  that  courts  should  be 
abreast  of  the  social  and  business  world  in  which  thej^  play 
so  important  a  part.  In  the  general  tendency  of  our  day  to 
demand  the  reason  of  things,  to  go  to  the  bottom  of  them, 
the  methods  of  our  judicial  tribunals  can  not  forever  es- 
cape the  searchlight  of  criticism."  The  process  M^hich  he 
invokes  is  the  examination  of  "rules  of  law  in  the  light 
of  a  broader  notion  of  human  rights,"  from  which  ex- 
amination "it  will  be  found  that  some  of  the  rules  ought 
never  to  have  been  made,  or  have  long  outlived  their  use- 
fulness, while  others  require  the  limitations  arising  from 
giving  effect  to  still  other  rules,  as  worthy  as  they  of 
consideration."  The  judges,  he  says,  "intelligent  and  en- 
lightened men"  though  they  be,  and  "ready  to  admin- 
ister the  law  as  justly  as  may  be  in  their  power,"  never- 
theless "find  their  hands  tied  by  traditions  which  they 
dare  not  ignore"  and  "need  leaders,  judges  brave  enough 
to  disregard  traditions  which  they  are  clear-headed  enough 
to  see  to  be  obstructive  to  justice,  and  who  are  also  capable 
of  showing  by  convincing  reasons  that  the  traditions  must 
be  cast  aside." 

Bartley,  Ch.  J.,  in  Leavitt  and  Lee  v.  Morrow,  6  Ohio  St. 
71,  at  p.  78,  says:  "Precedents  are  to  be  regarded  as  the 

"-Vol.  XII,  No.  1,  p.  14. 


STARE  DECISIS  51 

great  storehouse  of  experience ;  not  always  to  he  followed, 
but  to  be  looked  to  as  beacon  lights  in  the  progress  of 
judicial  investigation,  which,  although,  at  times,  they  may 
be  liable  to  conduct  us  to  the  paths  of  error,  yet,  may  be 
important  aids  in  lighting  our  footsteps  in  the  road  to 
truth.  "3° 

In  succeeding  chapters  we  shall  trace  the  birth  and 
growth  of  a  rule  in  the  law  that  has  been  variously  de- 
scribed by  great  judges  in  England  and  in  America  as 
' '  inveterate  error ' ' — ' '  an  absurdity  in  the  law ' ' — ' '  without 
reason" — "an  anomaly  in  the  law" — "an  irrational  state 
of  the  law."  Mistakes  in  the  law  due  to  conditions  long 
since  changed  have  been  corrected.  Many  younger  errors 
of  the  kind  have  long  ago  been  corrected  and  consigned 
to  the  limbo  of  judicial  curiosities.  This  one,  hoary  with 
three  centuries  of  age,  still  survives.  A  recent  newspaper 
report  told  of  an  old  lady  who  found  a  needle  which  she 
had  swallowed  when  a  child.  Not  long  ago  she  felt  a 
twinge,  put  her  hand  to  her  shoulder,  and  pricked  her 
finger  upon  the  needle.  It  had  been  voyaging  about  in 
the  old  lady's  system  for  fifty  years,  and  now  came  to 
the  surface  to  remind  her  of  its  presence.  Her  husband 
pulled  it  out  with  a  pair  of  tweezers.  The  doctrine  we 
are  about  to  study  is  the  needle  in  the  common  law  of 
arbitration.  By  inadvertence,  the  doctrine  of  revocahility 
was  swallowed  three  hundred  years  ago.  It  has  lingered 
in  the  system,  and  modern  conditions  bring  it  to  the 
surface  to  prick  our  fingers.  It  could  be  extracted  with 
little  pain,  with  no  harm  to  the  body  of  the  common  law, 
and  with  a  tonic  effect  upon  business.  It  has  lingered  only 
by  reason  of  the  doctrine  of  stare  decisis. 

The  late  Mr.  Charles  F.  Southmayd,  in  arguing  before 
our  Court  of  Appeals  in  1872,^^  said  that  'Uf  at  any  time 
within  the  last  fifty  years  (1822-1872)  the  question  would 

*"  Italics  ours. 
">See  post,  p.  232. 


52  COINIMERCIAL  ARBITRATION 

have  been  presented  as  a  new  one  to  the  courts,  no  such 
doctrine  would  have  been  established."  Even  then  it  was, 
as  he  said,  "upheld  purely  on  the  principle  of  stare 
decisis." 

Only  recently  Judge  Hough,  now  a  member  of  the  Fed- 
eral Circuit  Court  of  Appeals  for  the  Second  District, 
found  it  difficult  to  accept  the  doctrine,  so  examined  into 
it  with  some  care.  He,  like  Mr.  Southmayd,  could  find 
nothing  save  stare  decisis  to  support  it.  But  as  it  had 
been  approved  by  the  United  States  Supreme  Court,  it 
could  be  changed,  so  he  said,  only  by  that  Court's  action. 
The  rule,  said  he,  "must  be  obeyed  .  .  .  even  though  in- 
ferior courts  fail  to  find  convincing  reasons  for  it." 

The  rule  lacks  all  support  in  reason,  especially  in  the 
light  of  present-day  facts;  what  if  it  lack  support  in  au- 
thority— if  the  courts  err  in  believing  that  they  correctly 
stand  upon  precedent?  Suppose  lawyer  after  lawyer  and 
judge  after  judge  followed  what,  upon  closer  scrutiny, 
proves  to  be  no  authority;  suppose  in  the  country  from 
which  we  took  the  "precedent"  it  long  ago  lost  its  binding 
weight  and  authority;  shall  we  then  decline  the  task  of 
correcting  this  error  in  our  law?  Does  repetition  of  error 
make  it  truth? 


PART  TWO— THE   DOCTRINE  OF  RE- 
VOCABILITY:  A  JUDICIAL  ERROR 

CHAPTER  V 
ANALYSIS  OP  THE  ENGLISH  AUTHOEITIES 

The  earliest  readily  obtainable  book  on  the  subject  of 
arbitration  is  March  on  "Actions  for  Slander  and  Arbitre- 
ments,"  written  by  J.  0.  March,  of  Gray's  Inn,  Barrister, 
in  1648.  In  his  discussion  of  the  question^  "whether  the 
authority  of  arbitrators  be  countermandable  or  not," 
March  relies  upon  certain  Year  Book  cases  and  upon 
Brooke 's  Abridgment,  which  had  appeared  in  Law  French, 
described  by  Professor  Maitland  ^  as  "a  debased  jargon," 
seventy-five  years  earlier,  under  the  ominous  and  discour- 
aging title :  La  Grawnde  Ahridgem&nt,  Collect  &  escrie 
per  le  Judge  tres  reuerend  Syr  Robert  Brooke  CMvalier, 
nadgairs  chief e  Justice  del  comon  hanke. 

March's  views  will  bear  close  examination,  for  their  reve- 
lation of  the  early  attitude  toward  commercial  arbitra- 
tion: "In  this  case  also  the  Law  will  be  strong  and  evi- 
dent, that  this  authority  is  countermandable  at  any  time 
before  the  Award  made;  but  not  after:  because  then  the 
Authority  is  executed,  and  cannot  be  countermanded,  and 
so  are  all  our  Books,  but  5  E,  4,  where  it  is  said,  That 
if  a  man  be  bound  to  stand  to  the  Arbitrement  of  J.  N. 
he  cannot  discharge  the  Arbitrator;  contrary  if  he  were 
not  bound  to  stand  to  his  Arbitrement:  yet  Brook  upon 

*  March :  ' '  Actions  on  Slander  and  Arbitrements, ' '  p.  164. 
'Introduction  to  the  Year  Books  of  Edward  II,  p.  xxxiii,  edited 
for  the  Selden  Society  by  F.  W.  Maitland. 

53 


64  COMMERCIAL  ARBITRATION 

this  Case  saith,  That  it  is  clear  that  he  may  discharge  the 
Arbitrator  in  both  cases;  but  in  the  one  case  he  shall  for- 
feit his  Bond,  in  the  other  he  shall  lose  nothing,  because 
ex  nuda  suhmissione  non  oritur  actio;  so  likewise  it  is 
resolved  in  Vinyors  Case,  which  I  shall  put  you  presently. 

"In  28  H.  6  6  by  Ashton,  Justice,  If  there  be  two  Plain- 
tiffs, and  one  Defendant ;  or  two  Defendants  and  one  Plain- 
tiff, put  themselves  to  the  award  of  others,  neither  the  one 
Plaintiff  without  the  other,  nor  the  one  Defendant  with- 
out the  other,  may  discharge  the  Arhitrator;  the  reason 
is  obvious,  because  that  they  were  chosen  by  the  joynt 
authority  of  both,  and  therefore  cannot  be  countermanded 
by  one  alone. 

''But  that  which  is  the  last  and  best  authority,  is 
Vinyors  Case ;  where  it  is  resolved,  That  though  a  man  be 
bound  to  stand  to  the  Arbitrement,  etc.,  yet  he  may  coun- 
termand the  Arbitrators ;  the  reason  that  is  given  is,  be- 
cause a  man  cannot  by  his  own  act  make  such  an  au- 
thority, power  or  warrant;  not  countermandable,  which 
by  the  Law  and  its  own  proper  nature  is  countermandable : 
as  if  I  make  a  Letter  of  Attorney  to  make  Livery,  or  to 
sue  an  Action  in  my  name,  or  if  I  assign  Auditors  to  take 
an  account,  or  if  I  make  one  my  Factor,  or  submit  my  self 
to  an  Arbitrement,  though  that  these  are  done  by  express 
words  irrevocable,  or  that  I  grant,  or  am  bound  that  all 
these  shall  stand  irrevocable,  yet  they  may  be  revoked ; 
so  if  I  make  my  Testament  or  last  Will  irrevocable,  yet 
I  may  revoke  it. 

"But  in  this  case  it  was  further  resolved,  That  by  the 
countermand  or  revocation  of  the  power  of  the  Arbitrator, 
the  Bond  (according  to  the  Opinion  of  Brook  before 
cited)  is  forfeited,  because  he  was  bound  to  stand  to  his 
award,  which  he  doth  not  do  when  he  discharges  the  Ar- 
bitrator. I  have  sufficiently  cleared  it,  That  the  au- 
thority of  Arbitrators  is  countermandable."^ 

*  March:  "Actions  on  Slander  and  Arbitrements, "  pp.  164-166. 


ENGLISH     AUTHORITIES  65 

"We  shall  study  Vynior's  Case  separately.*  For  the  pres- 
ent let  us  consider  March.  It  will  be  observed  at  the 
outset  that  nothing  is  said  by  this  early  writer  to  indicate 
that  agreements  such  as  we  are  considering  are  against 
public  policy.  Whether  at  this  date  judges  were  influenced 
by  the  consideration  of  the  fees  of  their  office  to  draw 
litigation  to  themselves  {see  discussion  of  this  subject, 
post  p.  253  et  seq.),  it  would  nevertheless  appear  that  when 
March  wrote  (1648)  they  were  not  influenced  by  such  con- 
siderations. On  the  contrary,  March  himself  says,  speak- 
ing of  arbitrators  and  their  power,  "An  Arbitrator  is,  as 
our  Books  say,  a  Judge,  indifferently  chosen  by  the  parties, 
to  end  the  matter  in  controversie  between  them,  ad  Arhitri- 
um,  and  therefore  they  are  said  to  be  Arbitrators,  because 
they  have  an  Arbitrary  power,  and  may  judge  according 
to  their  will  and  pleasure,  so  that  their  Judgment  be  ac- 
cording to  the  submission;  and  these  Judges  are  not  tied 
to  any  formalities,  or  punctualities  in  Law,  neither  are  they 
sworn,  as  other  Judges  established  by  publike  authority 
are. 

"Besides,  their  Power  is  far  greater,  for  as  they  may 
judge  as  they  please,  keeping  themselves  to  the  Submis- 
sion, so  their  sentences  are  absolutely  definitive  and  con- 
clusive, from  which  there  lies  no  Appeal;  as  it  was  ex- 
cellently well  said  by  Heath,  Justice,  in  arguing  of  the 
Case  of  Rudston  and  Yates,  cited  before  (Mich.  17  Car.  in 
the  King's  Bench)  the  Judgment  of  Arbitrators,  said  he 
(provided  that  they  keep  themselves  to  their  Jurisdic- 
tion) is  higher  than  any  Judgment  given  in  any  Court; 
for  if  they  erre,  no  Writ  of  Error  lies  to  reverse  their 
Judgment,  no,  not  so  much  as  Equity  against  them."  ^  We 
find,  then,  that  at  this  time  the  courts  respected  arbitra- 
tion when  it  was  actually  had.  Indeed,  in  discussing  this 
very  topic  of  the  countermandability  of  the  authority  of 

*  See  post,  p.  84  et  seq. 
'March,  p.  160-161. 


56  COMMERCIAL  ARBITRATION 

arbitrators,  we  find  that  ]\Iarch  discourses  upon  the  effect 
of  a  revocation  without  deed  and  finds  that  where  the 
authority  is  "by  deed,  in  such  case  I  conceive  the  author- 
ity cannot  be  countermanded  but  by  deed  and  so  is  49 
E.  3.  9.  but  where  it  is  without  deed,  there  the  authority 
may  be  countermanded  without  deed;  and  this  I  ground 
upon  that  Rule  of  Law,  eodem  modo  quo  quid  creatur 
dissolvitur.  It  is  but  agreeable  to  natural  equity,  That 
every  thing  should  be  dissolved  by  the  same  means 
or  power  that  it  was  created.'"^  Thus  we  see  that  if  he 
who  desires  to  revoke,  where  the  submission  is  by  deed, 
fails  to  revoke  by  deed,  the  submission  is  good  and,  in 
consequence,  the  arbitrament  is  good.  So,  also,  March  dis- 
cusses "whether  there  ought  to  be  notice  of  the  counter- 
mand, or  not"'^  and  after  a  discussion  of  all  of  the  pre- 
ceding cases  he  finds  that  "It  was  resolved,  That  without 
notice,  it  is  not  revocation  of  the  authority ;  and  therefore 
if  there  were  no  notice  in  this  case  (saith  the  Book)  the 
Defendant  ought  to  have  taken  issue,  qwod  non  revocavit, 
etc.,  and  if  there  were  no  notice,  it  shall  be  found  for  the 
Defendant.  "8 

It  is  already  apparent  that  in  March's  time  the  courts 
engaged  in  the  strict  and  artificial  reasoning  of  the 
period,  reverently  drawing  conclusions  from  assumed 
premises,  in  accordance  with  the  rules  of  logic,  and 
acted  upon  these  conclusions,  however  absurd  the  conse- 
quences. Now,  coming  to  the  basis  for  the  statement  that 
the  authority  of  an  arbitrator  is  countermandable,  the 
reason  given  by  ]\Iarch  is  "because  a  man  cannot  by  his 
own  act  make  such  an  authority,  power  or  warrant;  not 
countermandable,  which  by  the  Law  and  its  own  proper 
nature  is  countermandable,""  and  he  draws  an  analogy 


•March,  p.  166. 
'Hid.,  p.  167. 
'Hid.,  pp.  167  and  168. 
•Ibid.,  p.  165. 


ENGLISH     AUTHORITIES  57 

from  the  authority  of  a  factor,  or  the  making  of  a  last 
will  and  testament,  or  a  letter  of  attorney  to  make  livery 
or  to  sue  an  action  in  a  principal's  name.  Obviously,  the 
use  of  the  words  "authorize  and  empower"  contained  in 
the  formal  deed  designating  the  arbitrator  led  the  judges 
to  think  of  the  arbitrator  as  an  agent,  for  otherwise  the 
"authority,  power  or  warrant"  would  not  at  that  time 
have  been  by  "its  own  proper  nature"  countermandable. 
Now,  it  is  a  very  curious  thing  that  but  a  few  pages 
anterior  to  this  statement  by  March,  in  discussing  the  na- 
ture of  an  ai'bitrator,  he  says  :^°  ' '  But  I  do  not  find  in  our 
Law,  that  either  legal  or  natural  disabilities,  do  hinder 
any  man  from  being  an  Arbitrator,  or  avoid  his  sentence, 
and  certainly  they  do  not;  for  this  differs  much  from 
the  submission  to  an  Arbitration,  for  in  such  case,  a 
man  ties  his  interest,  and  binds  his  person,  which  every 
one  is  not  of  capacity  to  do ;  but  in  this  case  what  he  doth 
as  arbitrator,  is  onely  to  charge  or  discharge  others.  And 
besides,  they  are  chosen  by  the  parties  themselves,  and 
if  they  be  not  competent  Judges,  the  fault  is  theirs  that 
chose  them."^^  As  we  have  seen  from  previous  discus- 
sion, the  arbitrator  is  in  no  sense  to  regard  himself  as  an 
agent.  He  may  be  a  mediator  or  even  a  judge,  but  he  is 
not  an  agent.  It  is  this  fundamental  error  of  reasoning 
to  which  Judge  Maule  later  referred  as  "inveterate  er- 
ror. ' ' 

In  1844,  the  Supreme  Court  of  Tennessee  made  this 
point  very  clear.^-  "It  has  been  argued,"  said  Judge 
Turley,  speaking  for  the  Court,  "that  the  award  having 
been  reduced  to  writing  and  signed  by  the  arbitrators,  it 
is  to  be  considered  as  a  settled  account  signed  by  the  par- 
ties, the  arbitrators  being  their  agents  for  that  purpose. 
We  do  not  think  so.     An  arbitrator  is  not  an  agent;  he 

^"lUd.,  pp.  159-160. 

"  Italics   ours. 

^Collins  V.  Oliver,  4  Humph.   (Tenn.)   439,  at  p.   440. 


58  COMMERCIAL  ARBITRATION 

is  not  acting  for  and  in  the  stead  of  the  party  selecting 
him,  whose  interest  it  is  his  bounden  duty  to  protect,  but 
as  a  person  vested  with  power  by  the  law  to  examine 
and  determine  the  matters  in  controversy,  which  have 
been  submitted  to  him,  and  whose  imperative  duty  it  is 
to  do  equal  justice  to  the  parties  disputant ;  his  duties 
are  more  of  a  judicial  than  a  fiduciary  character,  and  his 
determination  partakes  more  of  the  nature  of  a  judgment 
against,  than  a  contract  on  the  part  of  the  person  to  be 
charged ;  and  therefore,  w^here  the  award  has  been  made 
in  good  faith,  and  in  accordance  to  the  forms  required,  it 
is  binding  and  conclusive  upon  the  parties;  and  it  has  to 
be  sued  upon  only,  because  an  arbitrator  is  not  vested 
wdth  power  to  enforce  his  decrees  by  execution,  which  is 
the  end  of  the  law." 

Bell  tells  us  ^^  that  the  submission  in  Scotland  was  not 
held  revocable  at  the  w^ill  of  either  party  singly,  but  that 
it  might  be  done  only  by  the  concurrence  of  the  parties. 
His  reasoning  is  pertinent  here:  "Being  a  mutual  and 
onerous  contract,  and  the  object  of  it  being  to  obtain  a 
binding  and  final  decision,  which  must,  in  the  great  ma- 
jority of  instances,  occasion  much  disappointment  to  one 
at  least  of  the  parties,  it  is  difficult  to  understand  how  it 
should  ever  have  been  regarded  in  any  country  as  con- 
tinuing revocable  at  the  pleasure  of  either  party  up  to 
the  date  of  the  award.  This  seems,  on  the  contrary,  to  be 
incompatible  with  the  fair  or  beneficial  working  of  the 
system  of  arbitration."  Bell  (who  is  the  great  Scotch 
authority  on  the  law  of  arbitration)  says:  "Apparently, 
therefore,  no  men  could  (under  English  law)  even  by  the 
most  express  words  and  formal  deed,  make  an  irrevocable 
agreement  to  authorize  their  own  selected  arbiter  to  decide 
for  them.  It  is  impossihle  to  avoid  s^ispectlng  that  such 
a  doctrine  must  he  rested  upon  some  subtlety,  of  a  char- 

""Law    of    Arbitration    in    Scotland,"    1877.      2n(l    Edition,    pp. 
28,  29. 


ENGLISH     AUTHORITIES  59 

acter  too  refined  for  common  use."  "^^  Or,  to  quote  from 
Lord  Cranworth,  Chancellor,  in  Drew  v.  Drew,^^  this  fea- 
ture of  the  English  law  of  arbitration  by  which  parties 
might  revoke  an  agreement  to  arbitrate  "was  an  incon- 
venient, and,  I  think  I  maj''  be  allowed  to  say,  an  irrational 
state  of  the  law.  ...  I  say  that  was  an  absurd  state  of 
the  law.  ..." 

Before  proceeding  further  in  our  analysis  of  the  text 
writers  of  the  time  and  the  early  English  authorities  prior 
to  Vynior's  Case,  it  may  be  of  value  to  recreate  something 
of  the  environment  in  which  these  decisions  were  made, 
and  for  the  purposes  of  so  treating  the  matter  we  shall 
conveniently  discuss  it  under  two  headings : 

1.  The  slow  emergence  of  legal  concepts  of  contractual 
obligations. 

2.  The  conflict  between  the  Law  Merchant  and  the 
Common  Law. 

^*  Ibid.,  p.  29.     Italics  ours. 

^'^2  Macqueen's  Cases  on  Appeal,  pp.  3,  4  (Scotch,  1855).  Italics 
ours. 


CHAPTER  VI 

THE  SLOW  EMERGENCE  OF  LEGAL  CONCEPTS  OF 
CONTEACTUAL    OBLIGATIONS ' 

In  the  early  English  law,  before  the  Norman  Conquest, 
Pollock  and  Maitland  tell  us,  the  law  of  contracts  holds 
anything  "but  a  conspicuous  place  among  the  institu- 
tions of  English  law. " "  It  was  of  the  most  rudimentary 
form.  "Many  centuries  must  pass  away  before  it  wins 
that  dominance  which  we  at  the  present  day  concede  to 
it."'  And  again:  "Even  in  the  schemes  of  Hale  and 
Blackstone  it  appears  as  a  mere  supplement  to  the  law  of 
property."*  The  most  fundamental  rules  of  contract,  fa- 
miliar to  modern  lawyers  and  hardly  requiring  any  ex- 
planation, "perished  in  the  general  breaking  up  of  the 
Roman  system,  and  had  to  be  painfully  reconstructed  in 
the  middle  ages. ' '  ^  The  written  document  was  slow  in 
presenting  itself  as  a  validating  form  for  transactions. 
Though,  according  to  the  Lex  Bamana,  "anj^one  who  con- 
travenes or  will  not  perform  a  written  agreement  is  in- 
famous and  to  be  punished.""  In  the  early  English  law 
the  written  dociunent,  "which  few  have  the  art  to  man- 
ufacture, is  regarded  with  mystical  awe ;  it  takes  its  place 
beside  the  festuca  .  .  .  setting  one's  hand  to  it  is  a  stip'W- 

*For  most  of  the  statements  (except  as  otherwise  mentioned) 
nnder  this  point,  we  are  indebted  to  PoUoek  and  Maitland 's  ' '  His- 
tory of  the  Eng[]ish  Law,"  Vol.  II,  p.  182,  and  to  Page  on  Con- 
tracts, Vol.  I,  Chapter  I,  "History  of  the  Law  of  Contract." 

» Pollock  and  Maitland,  Vol.  H,  p.  182. 

» Ibid. 

*  Ibid. 

"Ibid.,  Vol.  TI,  pp.  182-183. 

'Ibid.,  VoL  n,  p.  190. 

60 


CONTRACTUAL  OBLIGATIONS  61 

latio;  it  is  delivered  over  as  a  symbol  along  with  twig 
and  turf  and  glove  ...  it  is  chiefly  used  as  a  means  of 
creating  or  transferring  rights  in  land  by  way  of  gift, 
sale,  lease  or  gage;  it  is  rarely  used  for  the  purpose  of 
creating  or  attesting  the  creation  of  purely  personal 
rights."''  The  Lombard  merchants,  familiar  in  Italy  with 
carefully  worded  documents,  found  it  difficult  to  under- 
stand why  contracts  so  familiar  under  Roman  law  should 
not  be  enforcible  under  English  law.  At  the  time  of  Al- 
fred's laws  "writing  has  hardly  been  used  for  any  legal 
purpose  except  when  land  is  to  be  conveyed  or  a  last  will 
is  to  be  made."^  Indeed,  there  is  no  sure  ground  earlier 
than  Glanvill's  book,  and  Glanvill  reminds  us  that  in 
the  twelfth  century  two  new  forces  are  beginning  to  play 
upon  the  law  of  contract.  The  classical  Roman  law  is  being 
slowly  disinterred  and  the  canon  law  is  taking  shape. 
' '  Glanvill  knows  a  little,  Bracton  knows  much  more  about 
both. ' '  *  Soon  in  Glanvill 's  writing  there  begins  to  emerge, 
as  appears  from  the  records  of  the  court,  a  special  form 
of  writ  for  formal  written  instruments,  known  as  the  writ 
of  covenant,  examples  of  which  are  given  by  Pollock  and 
Maitland  as  of  the  dates  of  1194  A.  D.  and  1201  A.  D.«  It 
is  only  during  the  century  following  Glanvill  that  the  ac- 
tion of  covenant  became  formally  established  as  a  means 
of  enforcing  formal  contracts.^"  By  the  reign  of  Edward  I. 
it  was  settled  that  a  sealed  instrument  was  necessary  to 
prove  a  covenant.  Accordingly,  the  action  of  covenant 
became  restricted  to  the  sealed  contract,  and  for  several 
centuries  covenant  and  deht  were  mutually  exclusive.  Not 
until  the  seventeenth  century  could  either  debt  or  covenant 
be  brought  where  a  fixed  and  liquidated  sum  of  money  was 
owing  under  a  sealed  contract.*^    Since  at  Common  Law 

*  rbid.,  Vol.  II,  pp.  190-191,    Italics  ours. 

"Ibid.,  Vol.  II,  p.  191. 

•Page,  Vol.  I,  p.  11. 

"Pollock  and  Maitland,  Vol.  II,  p.  214. 

^Ibid.,  Vol  II,  p.  217. 


62  COMMERCIAL  ARBITRATION 

a  contract  could  only  be  enforced  by  means  of  a  writ, 
Common  Law  courts,  accordingly,  during  the  twelfth  and 
the  greater  part  of  the  thirteenth  century  recognized  and 
enforced  only  two  classes  of  contracts — those  under  seal, 
and  those  resulting  in  a  fixed  and  liquidated  indebtedness. 
"For  the  numerous  and  varied  contracts  of  other  classes,  no 
remedy  ivas  given,  and  under  our  view  of  what  law  is, 
we  may  say  that  no  siich  right  was  recognized  hy  the  courts 
of  the  king."  ^-  It  was  during  the  latter  part  of  the 
twelfth  and  the  early  part  of  the  thirteenth  century  that 
the  Common  Law  courts  began  to  arrest  the  natural  de- 
velopment of  the  Common  Law  by  refusing  to  allow  new 
writs  to  be  framed  for  the  purpose  of  meeting  new  cases  as 
they  arose.  Page  observes  ^^  that  this  is  a  tendency  char- 
acteristic of  all  legal  systems  of  primitive  type  and  that  in  a 
nation  which  is  progressing  in  its  social  and  economic 
development  there  is  an  inevitable  and  irrepressible  con- 
flict between  legal  theories  and  the  facts  of  life.  "A  na- 
tion thoroughly  alive  will  not  remain  fettered  by  a  rigid 
system  of  law  based  on  an  obsolete  theory  of  society."  At 
this  time  began  the  English  custom  of  finding  relief  from 
such  situations  through  the  legislature.  The  statute  in 
consimili  casu  introduced  a  legal  reform  originating  with 
King  Edward  I.  Its  adoption  by  Parliament  was  due  to  his 
initiative.  It  is  the  Statute  13  Edw.  I,  Chapter  24,  passed 
in  1284  A.  D.  and  known  as  the  Statute  of  Westminster 
Second  because  of  the  place  wherein  Parliament  convened 
at  the  time  of  its  passage.  The  name  in  consimili  casu  owes 
its  origin  to  the  characteristic  words  of  one  of  the  sec- 
tions of  the  statute.  This  section  provides  that  "When- 
soever from  henceforth  it  shall  fortune  in  chancery  that  in 
one  case  a  writ  is  found,  and  in  like  case  falling  under 
like  law  and  requiring  like  remedy  is  found  none,  the 

"Page,  Vol.  I,  pp.  12-13;  Pollock  and  Maitland,  Vol.  II,  pp.  209- 
210. 
"Page,  Vol.  I,  p.  13. 


CONTRACTUAL  OBLIGATIONS  63 

clerks  of  chancery  shall  agree  in  making  the  writ;  or 
the  plaintiffs  may  adjourn  it  until  the  next  parliament,  and 
let  the  cases  be  written  in  which  they  cannot  agree,  and  let 
them  refer  themselves  (them)  until  the  next  parliament 
(and)  by  consent  of  men  learned  in  the  law  a  writ  shall 
be  made  (let  a  writ  be  made)  lest  it  might  happen  after 
that  the  court  should  long  time  fail  to  minister  justice 
unto  complainants. ' '  ^*  All  the  authorities  agree  that  this 
marks  a  turning  point  in  the  history  of  English  law  and 
that  "If  the  courts  had  refused  to  extend  their  juris- 
diction by  taking  advantage  of  this  statute,  equity  would 
have  so  developed  as  to  overshadow  Common  Law.  If 
the  courts  had  promptly  enforced  the  statute  in  the  spirit 
in  which  it  was  passed,  equity  would  have  had  but  a 
limited  field  for  its  operations.  As  it  was,  the  courts  com- 
promised. Slowly,  and  with  evident  reluctance,  they  took 
a  partial  and  limited  advantage  of  this  statute;  leaving 
equity  room  to  develop  side  by  side  with  the  Common 
Law.  "^'^  The  development  of  assumpsit  is  very  interest- 
ing. For  example,  as  Page  says,^^  "To  find  breach  of 
contract  classed  as  a  tort  is  in  some  respects  startling." 
Even  Blackstone  classifies  a  breach  of  contract  under  pri- 
vate wrongs  as  a  tort.  The  idea  that  breach  of  contract  is 
a  kind  of  tort  is  one  which  did  not  become  obsolete  for 
centuries  after  the  passage  of  the  Statute  of  Westminster. 
An  action  for  breach  of  contract,  as  we  know  it  today, 
was  unknown.  In  the  reign  of  Henry  IV  a  suit  was 
brought  against  a  carpenter  for  not  building  or  causing 
to  be  built  certain  houses  which  he  had  agreed  to  build. 
The  objection  was  made  that  the  plaintiff  was  really  count- 
ing on  a  covenant,  while  he  failed  to  show  a  sealed  con- 
tract. This  objection  was  sustained  by  the  court,  an  ohiier 
suggestion  being  made  that  perhaps  *  *  if  it  had  been  averred 

"  Ibid. 

"Ibid..  Vol.  I,  pp.  13-14.     Italics  ours. 

'« Ibid^,  Vol.  I,  p.  14. 


64.  COMMERCIAL  ARBITRATION 

that  the  work  was  begun  and  by  negligence  left  unfin- 
ished" an  action  might  have  lain.^^  Now,  Page  observes 
that  though  this  decision  was  "outwardly  on  a  question 
of  procedure"  it  was  necessarily  based  upon  the  theory 
"that  an  executory  contract  could  not  be  enforced  in  case 
of  mere  non-performance  unless  under  seal."  And  he 
calls  our  attention  to  the  fact  that  the  same  decision 
was  rendered  a  little  later  in  the  same  reign,  citing  Y.  B. 
11  Hen.  IV.,  33,  pi.  60.  In  the  reign  of  Henry  VI,  the  at- 
tempt to  enforce  executory  contracts  by  the  action  of 
trespass  was  renewed.  An  action  was  brought  for  breach 
of  a  contract  to  build  a  mill,  but,  crime  of  crimes,  it 
was  not  alleged  that  the  contract  was  under  seal  or  that 
the  defendant  had  done  anything  thereunder.  Ergo,  the 
question  presented  was  the  same  as  that  presented  in  the 
earlier  cases.  Two  out  of  the  three  judges,  however,  were 
brave  enough  to  hold  that  the  action  of  trespass  on  the 
case  would  lie.  The  third  judge  dissented  on  the  ground 
that  if  this  kind  of  action  would  lie  in  s^uch  a  case,  it  would 
Ue  on  every  broken  agreement!!  And  Page,  it  seems  to 
us  very  properly,  comments  that  "Historically  the  dis- 
senting judge  was  right.  The  majority  decision  was  a 
departure  from  precedent. "  ^^  It  was  this  departure  which 
forms  the  leading  case  on  what  is  now  regarded  as  a  very 
elementary  proposition — namely,  that  an  executory  con- 
tract not  under  seal  is  enforceable.  Now,  if  this  process 
was  a  slow  process,  the  next  development  of  assumpsit 
in  its  differentiation  from  other  forms  of  trespass  on  the 
case  was  an  equally  slow  process.  At  one  time  the  courts 
seemed  inclined  to  take  the  position  that  an  assumpsit 
was  not  a  contract  at  all,  and  even  after  assumpsits  were 
regarded  as  contracts  there  was  a  lingering  tendency  to 
treat  the  action  as  a  special  form  of  trespass  on  the  case. 

"Y.  B.,  2  Hen.  IV.,  .S  b.  and  4,  pi.  9;  Page,  p.  16. 
"Page,  Vol.  I,  p.  16. 


CONTRACTUAL  OBLIGATIONS  65 

Even  Blackstone  refers  to  "an  action  on  the  case  for  what 
is  called  the  assnimpsit  or  undertaking  of  the  defendant."^** 
It  was  only  after  assumpsit  became  an  established  and  dis- 
tinct form  of  action  that  the  technicalities  of  actions  and 
procedure  standing  in  the  way  of  enforcement  by  the 
courts  of  promises  which  the  law  might  hold  enforceable 
were  brushed  aside.  The  tendency  of  the  courts  to  treat 
assumpsit  as  a  form  of  trespass  in  the  case  and  the  fact 
that  assumpsit  finally  took  definite  shape  before  there  was 
any  sound  analysis  of  rights  according  to  their  inherent 
nature  led  to  the  anomalous  result  of  extending  assumpsit 
to  many  classes  of  cases  which  are  not  at  all  classed  as 
contracts  in  our  modern  legal  conceptions.  "The  promise 
in  such  cases  was  merely  a  legal  fiction  which  had  to  be 
pleaded  but  need  not  be  proved. ' '  ^'^  Without  reviewing 
further  this  development,  no  student  of  the  Common  Law 
under  which  we  live  can  fail  to  realize  that  for  very  simple 
and  ordinary  rules  of  contract,  accepted  as  commonplaces 
today  and  finding  firm  base  in  the  customs  of  merchants 
and  general  acceptance  under  Roman  law,  it  nevertheless 
took  centuries  of  English  judicature  and  parliamentary 
action  before  they  became  part  of  the  great  English  Com- 
mon Law.  Indeed,  says  Page,  "No  general  theory  of  con- 
tract was  developed  or  attempted  during  the  early  period 
of  the  Common  Law"  and  in  the  development  there  has 
been  free  borrowing  from  the  Roman  law;  but  "confu- 
sion necessarily  results  from  imposing  Modern  Law  with 
its  strong  tendency  toward  Roman  principles  upon  a  foun- 
dation of  early  Common  Law ;  and  from  attempting  to  har- 
monize the  two. ' '  ^^  Indeed,  says  Page,  *  *  we  must  ac- 
knowledge that  our  present  principles  cannot  be  applied 
to  the  early  Common  Law;  and  on  the  other  hand,  we 
must  also  acknowledge  that  many  of  the  peculiar  prin- 

^lUd.,  Vol.  I,  p.  17,  citing  Black.  Com.  Ill,  p.  157. 
■"^Ihid.,  Vol.  I,  p.  17. 
"/6id.,  Vol.  I,  p.  21. 


66  COMMERCIAL  ARBITRATION 

ciples  of  the  early  Common  Law  either  are  obsolete  or 
are  arrested  in  development  and  that  modern  contract 
law  owes  part  of  its  ideas  to  the  gradual  infusion  of  Roman 
Law  and  part  to  the  original  stock  of  the  Common  Law." 

Holmes  says:  "Lord  Mansfield  showed  his  intuition  of 
the  historical  grounds  of  our  law  when  he  said,  'I  take 
it  that  the  ancient  notion  about  the  want  of  consideration 
was  for  the  sake  of  evidence  only;  for  when  it  is  reduced 
into  writing,  as  in  covenants,  specialties,  bonds,  etc.,  there 
was  no  objection  to  the  want  of  consideration. '  ^^ 

"If  it  should  be  objected,"  says  Holmes,  "that  the  pre- 
ceding argument  is  necessarily  confined  to  debt,  whereas 
the  requirement  of  consideration  applies  equally  to  all 
simple  contracts,  the  answer  is,  that  in  all  probability  the 
rule  originated  with  debt  and  spread  from  debt  to  other 
contracts. ' '  ^^ 

"At  the  beginning  of  the  reign  of  Henry  VI  it  was 
probably  still  the  law  that  the  action  (of  debt)  would 
not  lie  for  a  simple  failure  to  keep  a  promise."" 

The  right  to  sue  upon  an  implied  quantum  meruit  was 
not  recognized  before  1609,^'  and  the  first  application  of 
this  principle  was  to  the  case  of  the  innkeeper.  "It  is 
an  implied  promise  of  every  part,  that  is,  of  the  part 
of  the  innkeeper,  that  he  will  preserve  the  goods  of  his 
guest,  and  of  the  part  of  the  guest,  that  he  will  pay  all 
duties  and  charges  which  he  caused  in  the  house."  -^  The 
next  beneficiary  of  this  doctrine  was  the  tailor  and  his 
right  to  recover  upon  a  quantum  meruit  was  recognized 
in  1610.^'     Sheppard  cites  a  case  in  1632,  which  he  says 


*■  Citing  Pillans  v.  Van  Mierop,  3  Burrow,  1663,  1669. 

** Holmes:    "The  Common  Law,"  p.   259. 

**Ibid.,  p.  282. 

"Ames:  "The  History  of  Assumpsit,"  Vol.  Ill,  "Select  Essays 
in  Anglo-American  Legal  History,"  p.  286. 

**  Warbrooke  v.  Griffin,  2  Brownl.  254 ;  Moore,  876,  877,  s.  c. 

*'Six  Carpenters'  Case,  8  Rep.  147  a.  "But  the  statement  that  the 
tailor  could  recover  in  debt  is  contratlicted  by  precedent  and  follow- 


CONTRACTUAL  OBLIGATIONS  67 

holds:  "If  one  bid  me  do  work  for  him,  and  do  not 
promise  anything  for  it;  in  that  case  the  law  implieth 
the  promise,  and  I  may  sue  for  the  wages."  The  whole 
law  of  lien  was  complicated  by  reason  of  the  failure  to 
recognize  the  validity  of  a  promise  implied  in  fact.  This 
failure  to  take  account  of  an  implied  promise  in  fact,  says 
Ames,  "greatly  puzzled  Lord  Ellenborough  and  his  col- 
leagues. Williams,  J.,  is  reported  to  have  said  in  1605: 
'If  I  put  my  cloths  to  a  tailor  to  make  up,  he  may 
keep  them  till  satisfaction  for  the  making.  But  if  I  con- 
tract with  a  tailor  that  he  shall  have  so  much  for  the  mak- 
ing of  my  apparel,  he  cannot  keep  them  till  satisfaction  for 
the  making.'  "  ^^  Of  course,  as  soon  as  the  right  to  recover 
upon  an  implied  quantum  meruit  was  accepted,  the  dis- 
tinction disappeared.^^ 

While  debts  founded  upon  a  specialty  were  all  rec- 
ognized as  valid  by  Glanvill,  Bracton  and  Britton,^°  never- 
theless the  king's  court,  says  Glanvill,  does  not  enforce 
*'privatas  convent iones  de  rehus  dandis  vel  accipiendis  in 
vadium  vel  alias  hujusmodi. ' '  ^^  And  Bracton  says  like- 
wise that  the  king's  court  will  not  concern  itself  except 
very  rarely  de  gratia  with  ^'stipulationes  convention- 
ales."^-  "As  there  are  several  cases  in  Bracton 's  Note 
Book,  in  which  the  validity  of  covenants  affecting  land  are 
assumed  to  be  valid,  Bracton,  in  the  passage  just  referred 
to,  probably  had  in  mind  miscellaneous  covenants."  ^^  "It 
is  certainly  true  that  the  rule  that  any  promise  under  seal 
may  give  rise  to  an  action  was  a  comparatively  late  de- 

ing  authorities."  (Ames:  "The  History  of  Assumpsit,"  Vol.  Ill, 
"Select  Essays  in  Anglo-American  Legal  History,"  p.  286.) 

"*  Ames :  "The  History  of  Assumpsit,"  Vol.  TTI,  "Select  Essays  in 
Anglo-American  Legal  History, ' '  p.  289,  citing  2  Roll.  Ab.  92,  pi.  1,  2. 

**  Ames :  ' '  The  History  of  Assumpsit, ' '  Vol.  Ill,  * '  Select  Essays 
in  Anglo-American  Legal  History,"  p.  289. 

**Ames:  "The  History  of  Parol  Contracts  Prior  to  Assumpsit," 
Vol.  Ill,  "Select  Essays  in  Anglo- American  Legal  History,"  p.  305. 

"Glanvill,  Lib,  X,  c.  12  and  c.  18. 

"Bracton,  f.  100,  a. 

"See  Pollock,  "Contracts"   (6th  ed.),  136. 


68  COMMERCIAL  ARBITRATION 

velopment  in  the  history  of  covenant.  As  late  as  the 
middle  of  the  fourteenth  century,  Sharshull,  J.,  said  in 
Y.  B.  21  Ed.  III.  7-20:  'If  he  granted  to  you  to  be  with 
you  at  your  love-day,  and  afterwards  would  not  come, 
perhaps  you  might  have  had  a  writ  of  covenant  against 
him  if  you  had  a  specialty  to  prove  your  claim.'  "  ^*  "We 
are  indebted  to  Professor  Ames  for  the  historical  anal- 
ysis of  the  development  of  the  law  of  parol  contracts  (i.  e., 
contracts  not  under  seal).  Of  course,  lawyers  of  the 
early  days  did  not  accept  the  doctrine  that,  after  ac- 
ceptance, an  offer  could  not  be  withdrawn.  Indeed  the 
rule  that  an  attempted  revocation  would  be  ignored  where 
the  offerer  had  promised  to  keep  the  offer  open  for  a 
fixed  term  and  had  received  a  valuable  consideration  for 
the  promise  first  found  its  rise  in  equity ;  likewise  the  rule 
that  attempted  revocation  would  be  ignored  and  a  sub- 
sequent acceptance  treated  exactly  as  if  no  attempted  revo- 
cation had  been  made.  The  early  English  judges  were  a 
long  time  in  accepting  as  a  legal  doctrine  the  proposition 
that  "A  person  may  by  his  acts  or  omission  to  act  waive 
a  right  which  he  might  otherwise  have  under  the  Con- 
stitution of  the  United  States  as  well  as  under  a  statute. ' '  ^^ 
Nor,  in  the  early  development  of  the  English  Common 
Law,  was  there  clear  understanding  of  the  nature  of  agency 
— for  example,  that ' '  An  agent  is  one  appointed  to  transact 
business  and  to  make  contracts  with  third  persons  in  place 
of  and  on  behalf  of  the  person  appointing  him,  known  as 
the  principal,"^*'  If  this  understanding  of  the  relation- 
ship of  principal  and  agent  had  been  in  the  minds  of  the 
early  English  judges,  how  could  they  have  treated  an  arbi- 
trator as  an  agent?    In  the  thirteenth  century  the  law  of 

**Ame8:  "The  History  of  Parol  Contracts  Prior  to  Assumpsit," 
Vol.  Ill,  "Select  Essays  in  Anglo-American  Legal  History,"  p.  305, 
footnote  3. 

"  Pierce  v.  Somerset  Railway,  171  U.  S.  641,  at  648. 

••Page,  Vol.  II,  p.  1503. 


CONTRACTUAL  OBLIGATIONS  69 

agency  was  in  its  infancy.^  ^  But  even  in  the  thirteenth  cen- 
tury men  could  not  appear  in  the  King's  Court  (except  by 
special  favor  purchased  from  the  king),  by  attorneys  to 
conduct  prospective  litigation.  The  idea  of  representation 
is  new,  though  by  this  time  it  has  ''spread  so  far  that  the 
debtor  who  in  express  written  words  promises  to  pay  money 
either  to  the  creditor  or  to  the  mandatory  (nuntius)  or 
attorney  of  the  creditor  is  bound  by  his  promise;  he  has 
himself  given  the  creditor  power  to  appoint  a  representa- 
tive for  the  exaction  of  the  debt. ' '  ^^  The  idea  of  grant  of 
powers  was  also  in  its  infancy,  for  while  the  king  ever  since 
John's  day  had  been  issuing  letters  of  credit  empowering 
his  agents  to  borrow  money  and  to  promise  repayment  in 
his  name  ^^  and  a  great  prelate  would  sometimes  do  the 
like,  it  is  by  this  time  only  admitted  that  a  man  might  by 
deed  appoint  another  to  do  certain  limited  acts.  As  has 
been  stated,  he  could  not  appoint  an  attorney  to  appear 
for  him  in  court  until  litigation  had  been  begun.  He  could 
appoint  an  attorney  to  deliver  and  receive  seisin.  "But  of 
any  informal  agency,  of  any  implied  agency,  we  read  very 
little.  "We  seem  to  see  the  beginning  of  it  when  an  abbot 
is  sued  for  the  price  of  goods  which  were  purchased  by  a 
monk  and  came  to  the  use  of  the  convent. ' '  ^°  Nor  did  these 
Common  Law  judges  understand  that  "A  partial  rescission 
of  an  entire  contract  cannot  be  had.  The  contract  must  be 
valid  or  void  in  toto."  *'^  Nor  had  they  reached  the  con- 
clusion that  there  were  no  reasons  of  public  policy  to 
' '  prevent  parties  from  agreeing  on  a  means  of  having  some 
fact  in  dispute  deteraained  by  an  agent  of  both  parties  as  a 
condition  precedent  to  litigation."*-     Nor  had  they  yet 

''Pollock  and  Maitland:  "History  of  English  Law,"  VoL  II, 
p.  225. 

^Ihid.,  Vol.  II,  p.  224. 

"/?>td.,  p.  225. 

*^Ihid.,  pp.  225,  226,  citing  Y.  B.  33-5  Edw.  I,,  p.  567. 

"Page,  Vol.  I,  p.  221,  citing  Yeomans  v.  Bell,  151  N.  Y.  230;  45 
N.  E.  552. 

-"Page,  Vol.  I,  p.  538,  citing  Scott  v.  Avery,  5  H.  L.  Cas.  811; 


70  COMMERCIAL  ARBITRATION 

realized  that  where  ''parties  are  attempting  to  adjust  by 
mutual  agreement  the  rights  and  liabilities  arising  out  of  a 
subsisting  inversion  of  a  legal  right,  such  contract  is  up- 
held if  otherwise  valid.  "^^  (For  example,  that  a  contract 
not  to  contest  the  validity  of  a  patent  or  to  arbitrate  ques- 
tions of  alimony  and  the  custody  and  maintenance  of  the 
children  are  valid.)  *^ 

AYe  may  say  with  Page,  therefore,  "that  many  of  the 
peculiar  principles  of  the  early  Common  Law  .  .  .  are 
obsolete  or  are  arrested  in  development."*^ 

The  peculiar  anomaly  of  the  revocability  of  agreements 
to  submit  controversy  to  arbitration  is,  indeed,  in  the 
biology  of  the  law,  an  instance  of  arrested  development. 
A  piece  of  Moorish  architecture  set  beside  a  Virginia 
colonial  mansion  at  once  arrests  our  eyes;  but  placed  in 
its  Oriental  setting,  its  curves  appear  natural  and  not  un- 
pleasing.  It  requires  some  re-orientation  in  our  thinking  to 
understand  a  doctrine  so  incongruous  to  modern  business 
as  the  one  that  a  solemn  promise  in  writing  to  submit  a 
controversy  to  arbitration  is  at  all  times  revocable. 

Samilton  v.  Ins.  Co.,  136  TJ.  S.  242;  President,  etc.,  of  Delaware  4' 
Hudson  Canal  Co.  v.  Pennsylvania  Coal  Co.,  50  N.  Y.  250. 

*^  Page,  Vol.  I,  p.  541,  citing  Northern  Liberty  MarTcet  Co.  v. 
Kelly,  113   U.  S.   199;   Baird  v.  Baird,  145  N.  Y.  659. 

"  Page,  Vol.  I,  p.  542,  citing  Philadelphia,  etc.,  Co.  v.  Davis,  etc., 
Co.,  77  Fed.  879  and  Masterson  v.  Masterson,  22  Ky.  L.  Eep.  1193, 
60  S.  W.  301. 

"Page,  Vol.  I,  p.  21. 


CHAPTER  VII 

THE  CONFLICT  BETWEEN  THE  LAW  MERCHANT  AND  THE 
COMMON  LAW^ 

Lord  Mansfield  did  not  become  Chief  Justice  of  the 
King's  Bench  until  1756.  Buller,  J.,  says  of  Lord  Mans- 
field that  he  "may  be  truly  said  to  be  the  founder  of  the 
commercial  law  of  this  country  (England)."  -  Buller  also 
said  that  "Lord  Mansfield  employed  his  learning  and  his 
genius  'not  only  in  doing  justice  to  the  parties  litigating 
before  him,  but  in  settling  with  precision  and  upon  sound 
principles  general  rules  afterwards  to  be  quoted  and  recog- 
nized as  governing  all  similar  cases. '  "  ^  Before  Mans- 
field's  time,  Campbell  tells  us,  "when  questions  necessarily 
arose  respecting  the  buying  and  selling  of  goods,  respect- 
ing the  affreightment  of  ships,  respecting  marine  insur- 
ances, and  respecting  bills  of  exchange  and  promissory 
notes,  no  one  knew  how  they  were  to  be  determined.  Not 
a  treatise  had  been  published  upon  any  of  these  subjects, 
and  no  cases  respecting  them  were  to  be  found  in  our  books 
of  reports.  ,  .  .  Mercantile  questions  were  so  ignorantly 
treated  when  they  came  into  Westminster  Hall,  that  they 
were  usually  settled  hy  private  ariitration  among  the  mer- 

^  For  nearly  all  of  the  material  in  this  chapter  we  are  indebted 
to  Carter:  History  of  English  Legal  Institutions,  Chapter  26,  Early 
History  of  the  Law  Merchant;  and  Smith  on  Mercantile  Law,  Vol.  1, 
Introduction. 

'  Lickbarroiv  v.  Mason,  2  T.  R.  63,  at  p.  73. 

'  Carter,  p.  280,  citing  Buller 's  opinion  in  LicTcbarrow  v.  Mason, 
2  T.  R,  63.  See  also  Lord  Campbell's  account  of  Lord  Mansfield  and 
his  special  jurymen — "Lives  of  the  Chief  Justices,"  Vol.  Ill,  pp. 
304,  305. 

71 


72  COMMERCIAL  ARBITRATION) 

chants  themselves."  ^  And  Buller,  J.,  is  authority  for  the 
statement,^  that  before  Lord  Mansfield  appeared,  "in 
courts  of  law  all  the  evidence  in  mercantile  cases  was 
thrown  together;  they  were  left  generally  to  a  jury,  and 
they  produced  no  established  principle." 

Seventeenth  century  law  reports  give  the  impression  that 
there  was  little  or  no  English  commerce  or  that  the  people 
engaged  in  commercial  pursuits  rarely  went  to  the  law- 
courts  to  settle  their  disputes.  There  are  hardly  any  com- 
mercial cases  reported  in  the  reports  of  two  centuries  ago. 
There  are  but  a  few  and  unimportant  eases  on  the  Law 
of  Bills  of  Exchange  up  to  the  time  of  Lord  Mansfield.® 
Mr.  Justice  Park,  in  his  work  on  ' '  Policies  of  Insurance, ' ' 
published  at  the  beginning  of  the  nineteenth  century,  says : 
"I  am  sure  I  rather  go  beyond  bounds,  if  I  assert  that  in 
all  our  reporters  from  the  reign  of  Queen  Elizabeth,  to  the 
year  1756,  when  Lord  Mansfield  became  Chief  Justice  of 
the  King's  Bench,  there  are  sixty  cases  upon  matters  of 
insurance."'  And  as  to  the  law  of  Charter  Parties  and 
Bills  of  Lading,  Sir  John  Davies  in  the  seventeenth  cen- 
tury wrote  that  "until  he  understood  the  difference  be- 
tween the  Law  of  Merchants  and  the  Common  Law  of 
England,  he  did  not  a  little  marvel  what  should  be  the 
cause  that  in  the  books  of  the  Common  Law  of  England 
there  should  be  found  so  few  cases  concerning  merchants 
and  ships,  but  now  the  reason  was  apparent,  for  that  the 
Common  Law  did  leave  these  cases  to  be  ruled  by  another 
law,  the  Law  Merchant,  which  is  a  branch  of  the  Law  of 
Nations. ' '  *    Says  Scrutton :   * '  The  reason  why  there  were 

♦"Lives  of  the  Chief  Jastices,"  Vol.  Ill,  pp.  299,  300;  italics 
ours. 

'  Lickbarrow  v.  Mason  (1787),  2  T.  R.  63,  at  p.  73;  1  Smith's  L.  C, 
lltb  ecL,  693. 

•Chalmers:  "Bills,"  Preface,  p.  36.  Scrutton:  "General  Survey 
of  the  History  of  the  Law  Merchant,"  Vol.  Ill,  "Select  Essays  in 
Anglo-American  Legal  History,"  p.  7. 

'  Park,  8th  Ed.,  Vol.  I,  Introduction,  p.  Ixxxix. 

•Zouch:   "Jurisdiction  of  the  Admiralty"    (1686),  p.  89. 


LAW  MERCHANT  AND  COMMON  LAW      73 

hardly  any  cases  dealing  with  commercial  matters  in  the 
Reports  of  the  Common  Law  Courts  is  that  such  cases  were 
dealt  with  by  special  Courts  and  under  a  special  law.  That 
law  was  an  old-established  law  and  largely  based  on  mer- 
cantile customs. ' '  ^ 

Malynes'  book — the  first  published  work  on  the  Mer- 
chant Law  in  England — is  entitled  ''Consuetudo  vel  Lex 
Mercatoria,"  i.  e.,  The  Ancient  Law  Merchant,  and 
Malynes  says  (1622) :  "I  have  entituled  the  book  accord- 
ing to  the  ancient  name  of  Lex  Mercatoria,  and  not  Jus 
Mercatonim,  because  it  is  a  customary  law  approved  by 
the  authority  of  all  kingdoms  and  commonweales,  and  not 
a  law  established  by  the  sovereignty  of  any  prince." 

Blaekstone  said  that  merchants  regulated  their  affairs 
"by  a  law  of  their  own  called  the  Law  Merchant  or  Lex 
Mercatoria,  which  all  nations  agi-ee  in  and  take  notice 
of."^°  Lord  Mansfield  declared  that  **  Maritime  law  is 
not  the  law  of  a  particular  country,  but  the  general  law  of 
nations.  "^^  In  1883,  Lord  Blackburn  declares  in  the 
House  of  Lords  that,  with  but  very  slight  differences  and 
peculiarities,  "the  general  rules  of  the  law-merchant  are 
the  same  in  all  countries."  ^^ 

Lord  Coke  (to  whose  decisions  we  shall  later  frequently 
refer)  became  Lord  Chief  Justice  in  1606.  Scrutton  finds 
that  this  date  marks  the  "first  stage"  of  three  stages  of 
development  of  the  Law  Merchant;  "before  that  time  you 
will  find  the  Law  Merchant  as  a  special  law  administered 
by  special  Courts  for  a  special  class  of  people. ' '  ^^    These 

•Scrutton:  "General  Survey  of  the  History  of  the  Law  Mer- 
chant," Vol.  Ill,  "Select  Essays  in  Anglo-American  Legal  History," 
p.  8. 

"Blaekstone:  Commentaries,  T,  273;  IV,  67. 

"  Luke  V.  Lyde,  2  Burr.  883,  at  p.  887. 

^M'Lean  v.  Clydesdale  Bank,  L.  R.  9  App.  Cas.  95,  at  p.  105, 

"Scrutton:  "General  Survey  of  the  History  of  the  Law  Mer- 
chant," Vol.  Ill,  "Select  Essaj's  in  Anglo-American  Legal  History," 
p.  9. 


74  COMMERCIAL  ARBITRATION 

were  the  "Courts  Pepoudrous. "  Even  in  Braeton's  time 
in  the  thirteenth  century,  it  was  clearly  recognized  that 
there  were  certain  classes  of  people  "who  ought  to  have 
swift  justice,  such  as  merchants,  to  whom  justice  is  given 
in  the  Court  Pepoudrous."" 

"The  records  of  these  Courts,"  says  Serutton,  "are  few, 
for  obviously  in  Courts  for  rapid  business  law  reporters 
were  rather  at  a  discount. ' '  ^° 

Lord  IMansfield,  it  will  be  recalled,  had  a  Scotch  train- 
ing, and  he  was  disinclined  to  favor  the  rigid  application 
of  the  principles  of  the  common  law.  IMany  of  his  de- 
cisions are  traceable  to  the  writings  of  jurists  of  other 
countries,  wherein  he  found  the  customs  of  merchants  all 
over  Europe.  Thus,  for  example  in  Luke  v.  Lyde,^^  where 
the  question  of  what  freight  was  to  be  paid  in  case  of  goods 
lost  at  sea  came  up  for  his  decision,  his  rich  knowledge  of 
foreign  law  permitted  him  to  refer  freely  to  the  Roman 
Pandects,  the  Cansolato  del  Mare,  the  laws  of  Wisbury 
and  Oleron,  and  various  old  English  writers,  as  well  as  the 
French  Ordonnances.  In  his  Life  of  Lord  Mansfield,  Lord 
Campbell  gives  us  a  very  interesting  account  of  Lord 
IMansfield 's  method  for  determining  commercial  contro- 
versies. He  says  Lord  Mansfield  reared  "a  body  of  spe- 
cial jurymen  at  Guildhall,  who  were  generally  returned 
on  all  commercial  causes  to  be  tried  there.  He  was  on 
terms  of  the  most  familiar  intercourse  with  them,  not 
only  conversing  freely  with  them  in  Court,  but  inviting 
them  to  dine  with  him.  From  them  he  learned  the  usages 
of  trade,  and  in  return  he  took  great  pains  in  explaining 
to  them  the  principles  of  jurisprudence  by  which  they 
were  to  be  guided.  Several  of  these  gentlemen  survived 
when  I  began  to  attend  Guildhall  as  a  student,  and  were 

"Bracton,   f.   334. 

"Serutton:  "General  Survey  of  the  History  of  the  Law  Mer- 
chant," Vol.  Ill,  "Select  Essays  in  Anglo-American  Legal  His- 
tory," p.  10. 

"2   Burr.  883. 


LAW  MERCHANT  AND  COMMON  LAW,       75 

designated  and  honored  as  'Lord  Mansfield's  jurymen.' 
One  in  particular  I  remember,  Mr.  Edward  Vaux,  who 
always  wore  a  cocked  hat,  and  had  almost  as  much  au- 
thority as  the  Lord  Chief  Justice  himself."" 

Though  the  courts  of  England  were  far  behind,  the 
merchants  had  made  great  advances  in  the  disposition  of 
mercantile  controversy.  Even  in  earlier  days  there  had 
been  commercial  tribunals  for  the  disposition  of  contro- 
versy. Before  the  lex  mercatoria  became  a  part  of  the 
Common  Law  of  England,  the  principles  of  commercial 
law  had  secured  not  only  a  foundation  in  the  habits  and 
customs  of  merchants,  but  business  men  had  developed 
a  procedure  of  their  own  for  enforcing  such  important 
instruments  of  commerce  as  contracts,  bills  of  exchange, 
and  insurance  policies.  As  Smith  says:  "The  dealings  of 
the  merchants  necessitated  the  use  of  simple  rules;  no 
technical  jurisprudence  peculiar  to  any  country  would 
have  been  satisfactory  to  traders  coming  from  many  dif- 
ferent countries.  It  was  necessary  that  there  should  be 
expeditious  settlements  of  disputes,  and  summary  execu- 
tions to  enforce  decisions  between  buyers  and  sellers,  who 
were  strangers  to  each  other,  and  who  dispersed  to  dis- 
tant places  when  their  transactions  were  over.  Hence  arose 
the  market  law,  to  which  reference  is  often  made;  ex- 
panded and  modified,  it  became  a  principal  part  of  lex 
mercatoria."  ^^ 

In  1693  Lord  Stair,  the  great  Scotch  writer,  wrote  (at 
a  period  when  commerce  had  made  little  progress  in  his 
own  country)  that  Scotch  law  and  custom  "regard  not 
inconsiderahle  damage  in  traffic,  that  it  (a  business  con- 
tract) may  be  current  and  secure,  for  nothing  is  more 
prejudicial  to  trade  than  to  he  easily  involved  in  pleas, 

"CampbeU:  "Lives  of  the  Lord  Chief  Justices,"  Vol.  Ill,  pp. 
304,  305,  note. 

"Smith,  "Mercantile  Law,"  11th  Ed.,  Vol.  I,  Introduction,  pp. 
Ixix,  Ixx. 


76  COMMERCIAL  ARBITRATION 

■which  diverts  merchants  from  their  trade,  and  frequently 
mm's  their  gain  and  sometimes  their  credit." '^^ 

Much  of  the  commerce  of  the  Middle  Ages  was  carried 
on  at  great  fairs.  There  was  little  other  foreign  trade. 
In  Champagne,  Besaneon  and  Lyons  in  France,  in  Ant- 
werp in  Belgium,  in  "Winchester  and  Stourbridge  in  Eng- 
land, fairs  were  held  where  "goods  were  bought  and  sold; 
orders  were  given  and  taken  there ;  outstanding  payments 
were  made  there;  and  there  obligations  to  be  discharged 
at  future  fairs  were  contracted."^''  It  is  interesting  in 
passing  to  observe  the  influence  of  these  markets  upon 
the  development  of  bills  of  exchange.  The  Italian  bank- 
ers invented  bills  of  exchange  because  they  were  embar- 
rassed by  the  difficulty  of  transporting  coin  and  by  the 
differences  in  coinage,  so  they  became  accustomed  to  trans- 
mitting money  or  settling  claims  at  the  close  of  the  in- 
ternational fairs.^^  Now,  these  markets  could  not  be  es- 
tablished without  the  permission  of  the  king,  and  it  be- 
came a  matter  of  course  to  attach  to  every  market  a 
Piepoudre  Court  "for  the  purpose  of  swiftly  deciding 
disputes  as  to  contracts  concluded  or  broken  within  the 
market."  '^^  Not  only  in  England,  but  in  Germany,  France 
and  Italy  special  market  courts  were  established.  The 
French  fairs,  and  more  especially  the  faires  de  Chatrir 
pagne,  acquired  by  royal  ordinances  important  privileges. 
The  maitres  des  foires  and  ctostodes  nundinarum  had  juris- 
diction over  all  the  business  of  the  fairs  and  thus  de- 
veloped what  we  now  know  as  the  lex  mercatoria,  "deter- 
mined by  merchants. ' '  ^^  The  intimate  relation  between 
the  transactions  of  merchants  and  mariners  at  this  time 
developed  the  law  of  admiralty.     The  law  merchant  was 

"  See  Maclcemie  v.  Girvan,  3  Session  Cases,  2nd  Series,  318,  at 
p.  323.     Italics  ours. 

"Smith:  "Mercantile  Law,"  11th  Ed.,  Vol.  I,  Introduction,  p. 
Ixix. 

'^  Ibid.,  footnote  D,  p.  Ixx. 

**Ibid.,  p.  Ixx. 

"Ibid.,  p.  lixi. 


LAW  MERCHANT  AND  COMMON  LAW      77 

"from  the  first  administered  in  local  and  popular  courts 
of  mercatores  et  marinarii,  and  was  intimately  connected 
with  the  King  in  Council. "  ^*  In  the  Statute  of  the  Staple 
(27  Edward  III,  Statutes  II,  Chapter  21)  there  is  statu- 
tory recognition  of  the  connection.  It  is  true  that  the 
Court  of  Admiralty,  after  a  struggle,  usurped  the  juris- 
diction of  these  local  and  popular  courts,  but,  in  turn, 
the  common  law  courts  "destroyed  the  Admiralty  jurisdic- 
tion by  repeated  prohibitions"  and  the  vaerchants," dissatis- 
fied with  the  illiberal  policy  of  the  common  lawyers,  might 
have  resorted  to  the  Courts  of  Chancery,  whose  doctrines 
and  practice  were  very  similar  to  their  own,  had  not  Lord 
Mansfield  appeared  to  create  the  mercantile  law  of  this 
cowntry. ' '  ^^  These  original  tribunals  of  the  merchants 
were  lay  and  "not  professional;  they  were  not  national, 
for  they  might  be  mixed.  The  men  who  formed  part  of 
a  market  Court  at  Antwerp  might  in  six  months  be  doing 
the  same  thing  at  St.  Ives  ,.  .  .  and  the  Statute  of  the 
Staple  directs  not  only  that  where  two  strangers  are 
parties  the  inquest  is  to  be  made  up  of  strangers,  and  if 
one  stranger  then  a  jury  de  medietate,  but  that  in  every 
staple  (the  staple  towns  were  Newcastle,  Lincoln,  York, 
Norwich,  Westminster,  Canterbury,  Chichester,  Winches- 
ter, Exeter,  Bristol,  Carmarthen,  Devylen,  Waterford,  Cork 
and  Drogheda)  there  shall  be  a  mayor  having  knowledge 
of  the  law  merchant  elected  by  strangers  as  well  as  deni- 
zens, two  'conveniable'  constables  chosen  by  the  merchants, 
and  two  merchant  aliens  to  be  associated  to  the  mayor  and 
constables  to  hear  the  plaints  of  merchant  aliens. ' '  ^^  Car- 
ter has  discovered,  as  illustrating  the  international  char- 
acter of  these  tribunals  and  the  internationality  of  the 
law  which  they  administered,  an  entry  in  the  manorial 
pleas  published  by  the  Selden  Society  (Select  Pleas  Ma- 

** Carter:   "History  of  English  Legal  Institutions,"  pp.  259-260. 
*^  Ibid.,  p.  260.     Italics  ours. 
^Jbid.,  p.  264. 


78  COMMERCIAL  ARBITRATION 

norial  Courts,  153)  namely,  "a  summons  to  all  the  mer- 
chants of  as  many  communities  as  there  were  present  at 
the  fair  of  St.  Ives,  A.  D.  1275,  to  present  themselves 
on  the  morrow  coram  seneschallo  to  consider  and  see  that 
four  merchants  have  justice  and  equity,  inasmuch  as  their 
servant  had  been  caught  measuring  canvas  with  a  false 
ell  and  selling  it."  Carter  tells  us  further  that  "The 
name  Piepoudre  was  frequently  given  to  those  Courts 
which  were  attached  to  fairs  'to  determine  the  plaints 
of  persons  passing  through  who  cannot  make  any  stay 
there;  such  persons,  that  is  to  say,  as  are  called  pepou- 
drous.'  "  ^^  These  were  courts  of  record,  and  if  the  fair 
was  a  franchise  of  some  lord,  the  court  was  held  before 
the  lord's  steward.  King  Edward  I  did  his  best  to  get 
the  merchant  speedy  justice.  In  the  ordinances  which 
he  made  when  he  took  into  his  hands  the  franchises 
of  the  City  of  London  appears  the  following: 

"And  whereas  the  king  doth  will  that  no  foreign  mer- 
chant shall  be  delayed  by  a  long  series  of  pleadings,  the 
king  doth  command  that  the  Warden  or  Sheriffs  shall 
hear  daily  the  pleas  of  such  foreigners  as  shall  wish  to 

make  plaint  .  .  .  and  that  speedy  redress  be  given  unto 
them.  "28 

Not  only  did  King  Edward  do  his  best  to  get  the  mer- 
chant speedy  justice,  but  he  also  invited  him  to  regard 
the  King  in  Council  as  the  ultimate  foundation  of  jus- 
tice; so  it  is  provided  in  the  Statute  of  the  Staple  (27 
Edw.  Ill,  Statute  II)  that  the  king's  judges  are  not 
to  take  cognizance  of  things  touching  the  staple  (§5) 
but  this  is  to  be  the  province  of  the  lay  tribunals  elected 
by  the  merchants,  who  are  to  apply  the  law  of  the  mer- 
chant and  not  the  common  law.  The  merchants  are  to  have 
right  done  them  from  day  to  day  and  from  hour  to  hour 
(§19).    In  case  of  doubt,  the  matter  goes  to  the  Council, 

"Carter:  "History  of  English  Legal  Institutions,"  p.  266. 
"  Ibid.,  p.  270. 


LAW  MERCHANT  AND  COMMON  LAW       79 

or  if  a  merchant  complains  of  want  of  justice,  the  Chan- 
cellor and  Council  are  to  redress  it  without  delay  (§21).^^ 
Carter  directs  our  attention  to  two  celebrated  cases  which 
went  to  the  king.  The  first  is  that  of  a  foreigner,  Simon 
Dederit  of  Guynes,  who  appealed  to  the  king  from  the 
great  fair  at  Ives  on  a  point  of  mercantile  law.  "This 
was  an  appeal  to  the  Dominus  Bex  at  "Westminster,  *et 
praedictus  Simon  dicit  quod  lex  mercatoria  talis  est  in 
omnibus  et  singulis  nundinis  per  totum  regnum.  Paratus 
est  verificare.'  His  opponent  denies  this,  and  the  sheriffs 
of  London,  Lincoln,  Winchester,  and  Northampton  are 
each  directed  to  produce  before  the  king  twelve  good  and 
lawful  merchants  to  recognize,  &c."  Carter  says  this 
case  shows  the  carefulness  of  that  tribunal  on  appeal 
to  the  Dominus  Rex  at  Westminster.  In  the  second  case 
(Y.  B,  13  Edw.  4,  p.  9)  to  which  Carter  refers,  a  mer- 
chant stranger  complains  to  the  Chancellor  and  judges 
in  Star  Chamber,  This  gentleman  had  come  into  Eng- 
land on  a  safe  conduct  and  his  goods  had  been  stolen  at 
Southampton.  The  Chancellor  solemnly  held  that  such 
a  person  was  entitled  to  sue  in  England  "according  to 
the  law  of  nature  in  the  Chancery,  that  is  the  law  mer- 
chant, which  is  law  universal  throughout  the  world. 
'Cest  suit  est  pris  par  un  nmrchant  alien  que  est  venus 
par  safe  conduit  icy,  et  il  n'est  tenus  de  suer  selonques  l& 
ley  del  terre  a  tarier  le  trial  de  xii  homes  et  autres  solempni- 
ties  del  ley  de  terre,  mes  doit  suer  icy  et  sera  determine 
solonques  le  ley  de  Nature  en  le  Chancery,  viz.  ley  Mer- 
chant que  est  ley  universal  par  toute  le  monde.'  "  ^o  In 
this  connection.  Carter  observes  that  "One  cannot  help 
being  struck  with  the  fact  that  the  Chancellor  is  here 
identifying  the  law  of  nations  with  the  law  of  nature, 
just  as  Roman  lawyers  identified  the  ius  gentium  with  the 
ideal  ius  naturae,'^  and  here,  summarizes  Carter,   "lay 

'Ibid.,  p.  271. 
"Ibid.,  pp.  271-272. 


80  COMMERCIAL  ARBITRATION 

the  bond  between  the  Chancellor  and  the  merchants.  He, 
like  the  praetor,  considered  what  was  aequum  et  honum 
and  what  was  agreeable  to  the  mores,  or  the  usages  of 
honest  and  honourable  people."  And  Carter  further  ob- 
serves that  ''One  might  go  further  and  surmise  that  the 
law  merchant  was  in  fact  largely  based  on  the  Roman 
law"  and  that  possibly  "the  law  merchant  was  the  channel 
through  which  the  Roman  law  chiefly  affected  our  law." 
Neither  the  Chancellor  nor  the  merchant  set  any  store 
on  consideration  or  seal.  The  evidence  is  that  the  doc- 
trine of  consideration  did  not  come  from  Chancery  and 
that  it  was  in  spite  of  the  efforts  of  Lord  Mansfield  that 
the  courts  of  common  law  forced  on  the  custom  of  mer- 
chants, which  knew  nothing  of  it,  the  purely  English 
indigenous  doctrine  of  consideration.^^  Carter  reminds 
us  that  *'the  civil  law  has  very  little  corresponding  to  our 
doctrine  of  consideration;  consent  made  the  contract; 
it  was  dishonor ahle  to  "break  a  promise  once  made." 
Very  early  writers  of  treatises  on  the  law  merchant, 
Malynes  (1622)  and  Marius  (1670),  were  not  lawyers,  but 
merchants,  and  Malynes  regards  not  so  much  what  the 
law  may  say  as  what  merchants  will  say.  "The  credit  of 
merchants  is  so  delicate  and  tender  that  it  must  be  cared 
for  as  the  apple  of  a  man's  eie."^^  "The  nature  of  a 
Bill  of  Exchange  is  so  noble  and  excelling  all  other  deal- 
ings between  merchants,  that  the  proceedings  therein 
are  extraordinary  and  singular,  and  not  subject  to  any 
prescription  by  law  or  otherwise,  but  merely  subsisting  of 
a  reverend  custom  used  and  solemnized  concerning  the 
same  (p.  261).  Such  is  the  sincerity  and  Candor  Anirni 
amongst  merchants  of  all  nations  beyond  the  seas  in  the 
observation  of  plain  dealing  concerning  the  said  Bills 
Obligatory  that  no  man  dare  presume  to  question  his  own 

"Carter:  "History  of  English  Legal  Institutions,"  p.  274,  citing 
Pillans  V.  Van  Mierop,  3  Burr.  1663. 
"P.  76. 


LAW  MERCHANT  AND  COMMON  LAW       81 

hand. ' '  "  And  Sir  John  Davies,  writing  ' '  Concerning  Im- 
positions" ahoiit  the  beginning  of  the  seventeenth  century, 
says,  "Whereas  at  Common  Law  no  man's  writing  can  be 
pleaded  against  him  as  his  act  and  deed  unless  the  same  be 
sealed  and  delivered,  in  a  suit  between  merchants,  Bills  of 
Lading  and  Bills  of  Exchange,  being  but  tickets  without 
seals,  letters  of  advice  and  credence,  policies  of  assurance, 
assignations  of  debt,  all  of  which  are  of  no  force  at  the 
Common  Law,  are  of  good  credit  and  force  by  the  Law 
Merchant.  "3* 

Now,  it  is  a  suggestive  historical  fact  that,  notwithstand- 
ing the  nature  of  mercantile  contracts  as  thus  treated 
by  merchants  themselves,  there  should  have  been  a  de- 
termination on  the  part  of  the  Common  Law  courts  to 
drive  the  mercantile  courts  out  of  existence.  Take,  for 
example,  the  treatment  of  marine  insurance.^^  In  the  mid- 
dle of  the  fifteenth  century,  the  magistrates  of  Barcelona 
devised  the  ordinances  of  insurance,  and  about  the  close 
of  that  century  the  practice  of  insuring,  having  been 
introduced  into  England  by  the  Lombards,  became  very 
general.  Yet  no  reported  decision  in  England  is  to  be 
found  before  the  reign  of  Elizabeth  for  the  very  obvious 
reason  that  merchants  disposed  of  such  disputes  in  their 
own  courts  or  in  some  domestic  forum.  By  the  statute 
of  43  Eliz.  c.  12,  Parliament  established  a  court  or  com- 
mission, consisting  of  the  recorder,  two  doctors  of  civil 
law,  two  common  lawyers  and  eight  "grave  and  discreet 
merchants,"  with  full  power  to  hear  and  determine  all 
assurance  cases  "in  a  brief  and  summary  course,  as  to 
their  discretion  shall  seem  meet,  without  formalities  of 
pleadings  or  proceedings" — in  short,  to  administer  mer- 
cantile law  in  the  summary  method  peculiar  to  it.     Yet 


"^Ibid.,  p.  74. 
•"Carter,  p.   275. 

"Smith:    "Mercantile  Law,"  11th  Ed.,  Vol.  I,  Introduction,  pp. 
Ixviii-bdx. 


82  COMMERCIAL  ARBITRATION 

these  courts  were  driven  out  of  existence.  The  first  and 
most  serious  blow  came  in  the  decision  in  the  case  of 
Came  v.  Moye.^^  In  this  case  the  Court  held  that  a  judg- 
ment by  the  commissioners  was  no  bar  to  an  action  at 
law.  It  will  be  observed  that  in  a  suit  upon  a  policy  of 
assurance,  the  commissioners  dismissed  the  suit  and  the 
defendant  pleaded  that  by  reason  of  the  fact  that  the 
plaintiff  had  been  defeated  before  the  commissioners,  its 
judgment  was  a  plea  in  bar,  *'as  it  is  Interest  Reipuhlicce 
ut  fit  Finis  litium."  Yet  the  Chief  Justice  and  the  entire 
Court  solemnly  held  that  this  court  had  no  jurisdiction 
in  rem  but  in  personam,  and  since  "there  is  a  certain 
rule  that  a  decree  in  a  court  of  equity  shall  not  be  a  bar 
to  an  action  at  Common  Law,  that,  by  analogy,  the  com- 
missioners being  treated  as  a  court  of  equity,  their  judg- 
ment was  not  a  bar  to  a  Common  Law  action."  How 
strange  this  all  sounds — that  a  Common  Law  court  should 
say  that  a  judgment  of  a  court  of  equity  had  no  binding 
effect  upon  it!  This  was  in  1658.  After  this  decision 
there  were  prohibitions  to  restrain  the  commissioners,  the 
court  fell  into  disuse,  and,  writing  in  1787,  Park,  J.,  said 
that  no  commission  had  issued  in  very  many  years. 

So,  too,  in  the  history  of  the  conflict  between  the  Ad- 
miralty Courts  and  the  Courts  of  Common  Law  in  Coke's 
time.  In  1575  an  agreement  was  entered  into  between 
the  Common  Law  judges  and  the  Admiralty  Court  and 
brought  about  a  temporary  lull  in  the  struggle.  Another 
agreement  was  arrived  at  in  1633^^  but  by  Lord  Hobart's 
decision  in  Bridgman's  case  ^*  cognizance  of  contracts 
made  at  sea,  but  not  for  or  in  respect  of  maritime  mat- 
ters, was  withdrawn  from  the  Admiralty  Court.  (Some 
time  between  1614-1625.)  By  fictitious  allegations  there- 
after contracts  really  made  at  sea  were  made  at  the  Royal 

"2  Sid.  121. 

"  Smith,  Vol.  I,  Introduction,  p.  Ixxvii. 

"Hob.  11. 


LAW  MERCHANT  AND  COMMON  LAW      83 

Exchange  and  so  actions  on  charter-parties  were  brought 
within  the  purview  of  the  courts  of  Common  Law. 

Holdsworth  calls  the  opposition  of  Coke  and  the  Com- 
mon lawyers  to  the  Court  of  Admiralty  "unscrupulous." 
"And,  from  the  point  of  view  of  the  Common  Law,  the 
attack  had  been  skilfully  directed  upon  a  position  which 
it  was  worth  much  to  secure;  for  the  prize  was  nothing 
less  than  jurisdiction  in  all  the  commercial  causes  of  a 
country  the  commerce  of  which  was  then  rapidly  expand- 
ing." Coke's  opposition  to  this  development  meant  "much 
inconvenience"  to  the  merchant  litigant  and  for  the  com- 
mercial law  of  the  country  "it  meant  a  slower  develop- 
ment." Indeed,  says  Holdsworth,  "if  Lord  Mansfield  is 
to  be  credited  with  the  honorable  title  of  the  founder  of 
the  commercial  law  of  this  country,  it  must  be  allowed 
that  Coke  gave  to  the  founder  of  that  law  his  oppor- 
tunity. ' '  ^^ 

»» Holdsworth :   "The  Law  Merchant,"  Vol.  I,  "Select  Essays  in 
Anglo-American  Legal  History,"  p.  319. 


CHAPTER  VIII 

COKE'S  DICTUM  IN  VYNIOR'S  CASE 

The  law  of  New  York,  like  that  of  most  of  the  states 
and  of  the  United  States,  may  be  traced  directly  to  Vyni- 
or's  Case.  In  Union  Insurance  Company  v.  Central  Trust 
Company,'^  Justice  Vann  says:  "The  earliest  authority 
upon  the  subject  is  the  celebrated  Vyyiior's  Case  (4  Coke, 
302),  where  the  condition  of  an  arbitration  bond  was 
*to  stand  to,  abide  by  and  perform  an  award.'  .  .  .  This 
has  been  followed  for  many  years  and  has  been  made  the 
basis  of  a  multitude  of  judgments  both  in  England  and 
in  this  country." 

The  line  backAvard  is  Aston  v.  George  (1819),  2  B.  & 
Aid.  395,  resting  upon  King  v.  Joseph  (1814),  5  Taunt. 
452,  resting  upon  Milne  v.  Gratrix  (1806),  7  East  608, 
derived  from  Vynior's  Case,  as  we  shall  presently  see, 

Vynior's  Case  was  decided  in  1609  (Trinity  Term,  7 
Jac.  1).  At  that  time  the  only  available  digests  were 
Statham's  Abridgement  (1470-5),  Fitzherbert's  Abridge- 
ment (1577),  and  Brooke's  Abridgement  (1576),  all  in 
old  French.^ 

In  writing  of  Anglo-Saxon  law,  Pollock  and  Maitland 
say:  "The  habit  of  preserving  some  written  record  of 
all  affairs  of  importance  is  a  modern  one  in  the  north 
and   west   of   Europe.      But   it   is   so  prevalent   and   so 

» 157  N.  Y.  633,  at  p.  642. 

*"We  here  remember  that  during  a  long  age  English  lawyers 
wrote  in  French  and  even  thouglit  in  French,  and  to  this  day  most 
of  the  technical  terms  of  the  law,  more  especially  of  the  private 
law,  are  of  French  origin."  (Encyclopanlia  Britannica,  11th  ed., 
Vol.  9,  p.  601,  article  "English  Law,"  by  F.  W.  M.  [1.  e.  F.  W. 
Maitland]). 

84 


COKE'S  DICTUM  IN  VYNIOR'S  CASE        85 

much  bound  up  with  our  daily  habits  in  modern  life 
that  we  have  almost  forgotten  how  much  of  the  world's 
business,  even  in  communities  by  no  means  barbarous, 
has  been  carried  on  without  it."  And  these  careful  stu- 
dents say,  evidently  expressing  their  own  feelings:  "And 
the  student  of  early  laws  and  institutions,  although  the 
fact  is  constantly  thrust  upon  him,  can  hardly  accept 
it  without  a  sort  of  continuing  surprise,"  They  remind 
us  that  there  is  great  danger  "of  overrating  both  the 
trustworthiness  of  written  documents  and  the  importance 
of  the  matters  they  deal  with  as  compared  with  other 
things  for  which  the  direct  authority  of  documents  is 
wanting,"  a  danger  that  "is  a  "specially  besetting  one  in 
the  early  history  of  English  law.  .  .  ."^  Ag£iin:  "Our 
Germanic  ancestors  were  no  great  penmen,  and  we  know 
that  the  reduction  of  any  part  of  their  customary  laws 
to  writing  was  in  the  first  place  due  to  foreign  influ- 
ence."* Yet  even  when  Vynior's  Case  was  decided,  great 
respect  was  paid  to  precedent  and  authority.  Coke,  in 
addressing  the  reader  in  an  Introduction  to  Part  VII  of 
his  reports,  enumerates,  among  the  dangers  against  which 
judges  should  guard:  "4.  Novelty;  for  I  have  ever  holden 
all  new  or  private  interpretations,  or  opinions,  which  have 
no  ground  or  warrant  out  of  the  reason  or  rule  of  our 
books,  or  former  precedents,  to  be  dangerous,  and  not 
worthy  of  any  observation:  for  periculosum  existimo  quod 
honorum  rirorum  non  comprobatur  exemplo."  Yet  the 
difficulty  of  determining  what  were  to  be  precedents  was 
the  first  reason  stated  by  Coke  for  publishing  his  own 
reports.'  His  opening  sentence  is:  "Nothing  is  or  can 
be  so  fixed  in  mind,  or  fastened  in  memory,  but  in  short 
time  is  or  may  be  loosened  out  of  the  one,  and  by  little 
and  little  quite  lost  out  of  the  other."     He  points  this 

*  History  of  English  Law,  Vol.  I,  p.  25. 
*IUd.,  p.  26. 

*Coke:    Reports,    Part    I,    trans.    Thomas   and   Fraser,    1826,   pp. 
XXV,  xxvi. 


86  COMMERCIAL  ARBITRATION 

with  the  observation  ^  that,  if  our  profession  in  former 
times  had  not  reported  ''to  ages  succeeding,  the  opinions, 
censures,  and  judgments  of  their  Reverend  Judges  and 
Sages  of  the  common  laws,"  "certainly  as  their  bodies  in 
the  bowels  of  the  earth  are  long  ago  consumed,  so  had 
their  grave  opinions,  censures,  and  judgments  been  with 
them  long  since  wasted  and  worn  away  with  the  worm 
of  oblivion.  ..."  And  for  himself  he  says:  "I  have 
often  observed,  that  for  want  of  a  true  and  certain  Re- 
port, the  Case  that  hath  been  adjudged  standing  upon 
the  rack  of  many  running  Reports  (especially  of  such 
as  understood  not  the  state  of  the  question)  hath  been 
so  diversely  drawn  out,  as  many  times  the  true  parts  of 
the  Case  have  been  disordered  and  disjointed,  and  most 
commonly  the  right  reason  and  rule  of  the  judges  ut- 
terly mistaken."  With  prophetic  vision  of  the  conse- 
quences of  his  own  dictum  in  Vynior's  Case  he  says: 
"Hereout  have  sprung  many  absurd  and  strange  opin- 
ions, which  being  carried  about  in  a  common  charm,  and 
fathered  on  grave  and  reverend  judges,  many  times  with 
the  multitude,  and  sometimes  with  the  learned,  receive 
such  allowance,  as  either  beguile  or  bedazzle  their  con- 
ceits and  judgments."^ 
It  was  not  until  1884  that  Prof.  Vinogradoff  discovered 


•Coke:  Exports,  Part  T,  trans.  Thomaa  and  Fraser,  1826,  p.  xxvi. 

*In  his  Introduction  to  Part  VIII,  Coke  points  out  how  two  very 
serious  errors  had  been  made  by  the  historians  even  of  his  own 
time,  through  failure  to  examine  original  sources  of  information. 
The  first  is  "that  the  trial  by  juries  of  twelve  men  (which  is  one 
of  the  invincible  arguments  of  the  antiquity  of  the  common  laws, 
being  only  appropriated  to  them,)  was  not  instituted  by  the  powerful 
will  of  a  conqueror,  as  some  of  them  peremptorily  affirm  they  were"; 
and  second,  "that  the  Court  of  Common  Pleas  was  not  erected 
after  the  statute  of  Magna  Charta  (which  was  made  in  the  ninth 
year  of  King  Hen.  3)  contrary  to  that  which  others  do  hold."  As 
to  tho  first,  he  says,  "there  is  nothing  more  untrue,  for  it  is  most 
certain  and  apparent  by  the  laws  of  King  Etheldred  that  it  (trial 
^y  jury)  w-as  in  use  many  years  before"  and  similarly,  he  traces 
the  error  concerning  the  history  of  the  Court  of  Common  Pleas. 
See  "post,  p.  135  ct  seq. 


COKE'S  DICTUM  IN  VYNIOR'S  CASE        87 

in  the  British  Museum  the  manuscript  of  Braeton's  Note 
Book,  and  not  until  1887  that  IMaitland  published  the 
first  edition  of  it  in  Latin.  The  first  English  translation 
of  either  Statham,  Brooke  or  Fitzherbert  was  published  in 
1915  by  the  Boston  Book  Company,  a  translation  of  Stat- 
ham's  Abridgment  by  i\Iargaret  Center  Klingelsmith.  It 
is  only  within  the  past  decade  that  the  Year  Books  have 
been  partially  translated  into  English  by  the  Ames  Foun- 
dation and  the  Selden  Society.  Yet  even  within  these  lim- 
its of  modem  research  we  may  be  able  now  to  fix  and 
determine  the  true  place  of  Vynior's  Case,  and  its  succes- 
sors in  the  Common  Law. 

First  of  all,  let  us  study  with  a  little  care  the  case 
itself.  It  was  decided  in  1609.  It  appears  in  three  dif- 
ferent reports,  in  the  original  Year  Book  as  7  Jac,  1,  rot. 
2629 ;  twice  in  Brownlow  and  Goldesborough 's  Reports  (2nd 
Ed.  1654)  ;  and  finally  in  Coke's  own  Reports,  Part  VIII, 
at  p.  80.  It  is  the  latter  volume  which  is  most  frequently 
cited  which  we  shall  first  examine ;  ^  the  difference  in  the 
several  reports  will  later  bear  examination. 

The  first  sentence  in  the  report  is  illuminating:  "Rob- 
ert Vynior  brought  an  action  of  debt .  against  William 
Wilde,  on  a  bond  of  £20."  Upon  examining  the  plead- 
ings, we  find  that  the  bond  contained  the  following  lan- 
guage: 

"The  condition  of  this  obligation  is  such,  that  if  the 
above  bounden  William  Wilde  do  and  shall  from  time  to 
time,  and  at  all  times  hereafter,  stand  to,  abide,  observe, 
perform,  fulfil,  and  keep,  the  rule,  order,  judgment,  ar- 
bitrament, sentence,  and  final  determination  of  William 
Rugge,  Esq.,  arbitrator  indifferently  named,  elected,  and 

*  Coke's  Eeports  became  "The  Eeports"  (literally)  as  soon  as 
they  appeared.  Parts  1  to  11  were  first  published  in  French,  at 
different  times  between  1602  and  1615  (Lincoln's  Inn  Catalogue), 
or  1607-1615  (Harvard  Law  Library).  Parts  12  and  13  were  not 
published  until  1656  and  1659  (Lincoln's  Inn  CatalogTie),  long  after 
Coke's  death.  The  first  eleven  parts  were  reprinted  in  English  in 
1658.     (Soule:    "Lawyer's  Reference  Manual,"  p.  92.) 


88  COMMERCIAL  ARBITRATION 

chosen,  as  well  of  the  part  and  behalf  of  the  said  W. 
"Wilde,  as  of  the  part  and  behalf  of  the  above  named  Rob- 
ert Vynior,  to  rule,  order,  adjudge,  arbitrate,  and  finally 
determine,  all  matters,  suits,  controversies,  debates,  griefs, 
and  contentions  heretofore  moved  and  stirred,  or  now 
depending  between  the  said  parties,  touching  or  concern- 
ing the  sum  of  two  and  twenty  pence,  heretofore  taxed 
upon  the  said  W.  "Wilde,  for  divers  kind  of  parish  busi- 
ness within  the  said  parish  of  Themilthorpe ;  so  as  the 
said  award  be  made  and  set  down  in  writing,  under  the 
hand  and  seal  of  the  said  William  Rugge  at  or  before 
the  feast  of  St.  Michael  the  Archangel  next  ensuing  after 
the  date  of  these  presents,  that  then  this  present  obliga- 
tion to  be  void  and  of  no  effect,  or  else  the  same  to  stand, 
abide,  remain,  and  be  in  full  force,  power,  strength  and 
virtue." 

In  short,  here  is  a  bond,  under  seal,  with  conditions 
endorsed  thereon,  the  purpose  of  which  is  to  insure  the 
observance  by  William  Wilde  of  an  award  to  be  made 
by  William  Rugge,  arbitrator.  Robert  "Vynior  held  this 
bond  and  upon  it  he  sought  to  hold  AVilde,  He  succeeded 
— the  last  sentence  of  the  decision  is:  "And  afterwards 
judgment  was  given  for  the  plaintijf." 

At  this  period  in  our  Common  Law  one  concept  at 
least  had  become  firmly  fixed,  namely,  that  a  bond  sol- 
emnly given  under  seal  must  be  enforced,  unless  the  obligor 
were  released  by  the  happening  of  one  or  more  of  the 
conditions  endorsed  upon  the  bond.  Into  this  doctrine  of 
law,  as  early  understood,  entered  no  consideration  of  prin- 
ciples of  contract  law,  no  discussion  of  executed  or  ex- 
ecutory contract.  The  bond,  by  virtue  of  the  seal,  attained 
a  sanctity  all  its  own.  Like  the  grant  in  a  deed,  it  vested 
in  the  obligee  certain  rights  defeasible  only  upon  the  hap- 
pening of  certain  definite  contingencies.  Now,  if  the 
happening  of  the  contingency  or  condition  was  prevented 
by  the  act  of  the  obligor  himself,  the  old  judges  saw  the 


COKE'S  DICTUM  IN  VYNIOR'S  CASE        89 

grave  injustice  iu  not  permitting  the  obligee  to  enforce 
the  bond,  for,  in  truth  and  common  reason,  no  man  should 
be  permitted  to  relieve  himself  of  an  obligation  by  his 
own  act.  So,  as  early  as  1482,^  it  is  said,  in  an  action 
in  detinue  on  a  bond:  "If  you  make  a  bond  to  enfeoff 
me  of  the  manor  by  deed  before  a  feast  and  you  make 
feoffment  of  that  manor  to  another  before  the  said  feast, 
you  nevertheless  have  forfeited  the  bond  because  you 
have  made  impossible  the  performance  of  the  condition 
thereof."  It  is  this  very  case  which  furnishes  the  ratio 
decidendi  of  Vynior's  Case.  The  argument  in  Yynior's 
Case,  as  well  as  the  decision,  establishes  this  fact  very 
clearly.  William,  the  defendant,  by  John  Russell,  his 
attorney,  by  way  of  defense,  prays  oyer  of  the  writing, 
and  after  hearing  it,  he  says,  that  "Robert  ought  not  to 
have  his  action  aforesaid  against  him,  because  he  saith, 
that  the  arbitrator  aforesaid,  after  the  making  of  the  writ- 
ing, and  before  the  aforesaid  feast  of  St.  Michael  the 
Archangel,  in  the  condition  aforesaid  above  specified,  did 
not  make  any  aiuard^^  in  writing,  under  the  hand  and 
seal  of  the  same  arbitrator,  between  him  the  said  Wil- 
liam and  the  aforesaid  Robert."  Ergo,  argued  Russell, 
the  condition  of  the  bond  had  not  arisen  "according  to 
the  form  and  effect  of  that  condition;"  and  he  professed 
to  stand  ready  to  verify  the  fact  on  the  proofs.  "Ah!" 
said  Robert,  but  the  reason  why  the  arbitrator  did  not 
make  his  award  is  that  you,  William,  "after  the  making 
of  the  writing  aforesaid,  and  before  the  aforesaid  feast 
of  St.  Michael  the  Archangel,"  did  revoke  "and  did  call 
back  all  the  authority  whatsoever  which  the  said  William 
Wilde,  by  the  said  writing  obligatory  had  given  and  com- 
mitted to  the  aforesaid  William  Rugge,  his  arbitrator, 
and  then  altogether  disallowed  and  held  void,  and  all 
and  whatsoever  the  aforesaid  William  Rugge,  after  the 

•  21  Edw.  IV,  54,  55. 
-'  Italics  ours. 


90  COMMERCIAL  ARBITRATION 

delivery  of  the  same  writings  of  revocation,  should  do 
to  (for)  him  in  and  about  the  said  arbitrament,"  etc. 
And  this  he,  Robert,  was  willing  to  stand  to  and  prove. 
To  this  replication,  William  demurred,  saying  that  he  was 
not  required  ''hy  the  law  of  the  land"  to  answer.  There- 
upon William  prayed  for,  and  obtained,  judgment  upon 
the  pleadings. 

Now,  there  are  a  number  of  technical  points  in  the  case. 
It  is  argued,  that  it  was  not  pleaded  that  the  revocation 
had  been  communicated  to  Rugge,  the  arbitrator.  But  the 
court  disposed  of  this  upon  precedent,  saying  that  it  made 
no  difference,  because  the  words  "revocavit  et  abrogavit 
omnem  authoritatem,  &c."  implied  notice  in  themselves 
"for  without  notice  it  is  no  revocation  or  abrogation  of 
the  authority."  Consequently,  on  the  plea  non  revocavit 
the  defendant  could  have  his  day  in  court.  Then  there  is 
much  discussion  over  the  form  of  the  bond,  whether  or 
not  it  is  in  legal  effect  the  same  as  one  in  5  Edw.  IV. 
3b,  where  the  Court  said  the  obligor  "cannot  discharge 
the  arbitrament,  but  that  he  shall  forfeit  his  bond."  But 
the  fine  spun  reasoning  of  Coke  over  the  meaning  of 
"stand  to"  and  "abide  by"  is  swept  aside  215  years  later 
by  Abbott,  C.  J.    (1825)."    "The  distinction  drawn  be- 

^^Warhurton  v.  Storr.  Barnewall  &  Cresswell's  "Reports,  Vol.  IV, 
p.  103.  This  case  was  an  action  in  debt  upon  an  agreement  which 
provided  that  the  plaintiff  having  commenced  an  action  against 
the  defendant,  they  "  'did  agree  with  and  to  each  other,  that  they 
the  said  plaintiff  and  defendant  respectively  should  and  would  well 
and  truly  observe,  perform,  and  keep  the  award,  order,  arbitrament, 
and  final  determinntion  of  C.  S.,'  concerning  the  said  action,  to  be 
made  within  a  certain  time.  'And  each  of  the  said  parties  did 
thereby  bind  himself  and  his  executors,  &c.,  unto  the  other  of  them 
his  executors,  &c.,  in  the  penal  sum  of  100£  for  the  true  and  faith- 
ful observance  and  performance,  on  their  respective  parts,  of  the 
award  and  determination  wliich  should  be  made  as  aforesaid.'  "  The 
defendant  revoked  the  arbitration  before  the  time  of  the  award. 
Campbell,  in  support  of  the  demurrer  raised  in  behalf  of  the  de- 
fendant, argued :  ' '  Where  an  arbitration  bond  is  given  containing 
in  the  usual  form  a  condition  that  tlie  parties  shall  '  stand  to  and 
abide'  the  award;  it  has  been  held  that  the  condition  is  broken  by  a 
revocation    of    the    submission,    but   that   if    tho    words   are    merely 


COKE'S  DICTUM  IN  VYNIOR'S  CASE        91 

tween  the  different  wortls  above  cited,"  said  Abbott,  "is, 
I  must  confess,  extremely  nice  and  subtle,  nor  can  I  dis- 
cover any  real  and  substantial  difference  between  them." 
He  holds  in  this  case  that  it  is  "a  well  known  and  estab- 
lished rule  of  law,  that  if  a  party  covenants  to  do  a  cer- 
tain thing,  and  afterwards,  by  his  own  act,  disables  him- 
self from  performing  it,  that  is  in  itself  a  breach  of 
the  covenant.  This  rule,"  he  says,  "is  so  well  estab- 
lished that  authorities  need  not  be  cited  in  support  of  it. ' ' 
Accordingly,  he  finds  that  "the  second  reason  in  Vy7nor's 
case  is  clearly  applicable  to  the  present,  viz.  that  as  the 
obligor  had  by  his  own  act  made  the  condition  of  the  bond 
impossible  to  be  performed,  the  bond  had  become  single." 
We  see  here  how  the  rule  came  to  be  applied  to  con- 
tracts as  well  as  to  bonds.  Says  Abbott,  "Apply  that  to  a 
covenant,  and  it  falls  precisely  within  the  rule  which  I 
have  before  mentioned.  So  here,  the  defendant  having 
agreed  under  a  penalty  to  perform  an  award,  and  having, 
by  a  revocation  of  the  submission,  disabled  himself  from 
doing  so,  he  has  broken  his  agreement,  and  thereby  sub- 
jected himself  to  an  action  for  the  penalty." 

Thus  Coke 's  subtle  reasoning  as  to  the  form  of  the  bond 
is  disposed  of  and  so  far  as  this  case  is  concerned,  his 
admonition  to  the  lawyers  to  stick  to  the  old  forms  is 
entirely  unnecessary.  "This  form,"  he  says,  "was  in- 
vented by  prudent  antiquity,  and  it  is  good  to  follow, 
in  such  cases,  the  ancient  forms  and  precedents,  which 
are  full  of  knowledge  and  wisdom."  It  is  this  reverence 
for  old  forms  and  precedents  and  the  technical  pleading 
of  those  days  that  will  aid  us  to  understand  the  nature 
of  the  error  in  the  evolution  of  this  branch  of  the  law. 

'observe,  perform,  fulfill,  and  keep'  the  award,  there  the  condition 
is  not  broken  unless  an  award  is  made  and  not  performed,"  for 
which  he  cites  Vynior's  Case — an  error  of  very  serious  consequence, 
for  any  careful  reading  of  the  Vynior  Case  would  have  shown  that 
the  bond  in  the  Vynior  Case  did  contain  these  words,  "stand  to, 
abide,  observe,"  etc. 


92  COMMERC  TAL  ARBITRATION 

Vynior  recovered  upon  his  bond.  Wilde  had  precluded 
the  making  of  the  award;  "Wilde  was  in  the  wrong;  there- 
fore, judgment  goes  against  him.  There  was  then  no 
rule  or  public  policy  against  enforcing  penalties.  So 
Vynior  was  allowed  to  recover  the  full  penalty,  which, 
we  may  assume,  he  had  made  large  enough  to  cover  him 
fuUy  in  case  the  arbitration  did  not  take  place.  There 
is  no  consideration  of  any  "ousting  of  the  Court's  juris- 
diction." On  the  contrary,  the  Court  takes  jurisdiction 
and  seems  to  think  that  it  is  carrying  out  a  sound  public 
policy  in  enforcing  the  bond.  It  quotes  the  decision  in  5 
Edw.  4.  3/b.  for  the  proposition  "that  the  obligor  cannot 
discharge  the  arbitrament,  but  that  he  shall  forfeit  his 
bond." 

It  will  be  obser\'ed  that  thus  far  in  our  study  of  the 
case  we  have  not  found  it  necessary  to  consider  the  revo- 
cability  of  the  submission.  Now  we  come,  however,  to 
the  words  which  have  since  brought  about  all  the  mis- 
chief. "William's  lawj'er  argued:  "That  although  "W. 
Wilde  the  defendant  was  bound  in  a  bond  to  stand  to, 
abide,  observe,  &c.,  the  rule,  &c.  arbitrament,  &c.  yet  he 
might  countermand  it;  for  a  ynan  cannot  hy  his  act  make 
such  authority,  power,  or  warrant  not  count ermwidaile, 
which  is  hy  the  law  and  of  its  own  nature  coimtermand- 
ahle."  ^-  This  argument  is  clearly  unnecessary  to  the  de- 
cision of  the  case,  because,  as  we  have  seen,  the  court 
could  and  did  dispose  of  it  upon  the  proposition  that  when 
AVilliam  revoked  the  authority  of  the  arbitrator,  he  made 
it  impossible  for  one  of  the  conditions  of  the  bond  to  arise 
and  thus,  as  the  old  judges  said,  "the  bond  became  sin- 
gle"— i.e.  enforceable.  But,  though  the  statement  is  un- 
necessary to  the  case,  it  is  repeatedly  cited  as  though  it 
were  final  and  settled  doctrine.    A  man,  says  March,  can- 

"  Italics  ours. 


COKE'S  DICTUjM  IN  VYNIOR'S  CASE        93 

not  by  his  own  act,  "make  such  an  authority,  power,  or 
warrant:  not  countermandable,  which  by  the  Law  and  its 
own  proper  nature  is  countermandable. ' '  ^^ 

Let  us  consider  the  proposition  upon  its  merits.  Is 
it  sound  in  reason  or  in  precedent,  even  in  the  day  of 
Coke  ?  The  argument  is :  "  If  I  make  a  letter  of  attorney 
to  make  livery,  or  to  sue  an  action,  &c.  in  my  name;  or 
if  I  assign  auditors  to  take  an  account;  or  if  I  make  one 
my  factor;  or  if  I  submit  myself  to  an  arbitrament;  al- 
though these  are  made  by  express  words  irrevocable,  or 
that  I  grant  or  am  bound  that  all  these  shall  stand  ir- 
revocably, yet  they  may  be  revoked ;  so  if  I  make  my  testa- 
ment and  last  will  irrevocable,  yet  I  may  revoke  it,  for  my 
act  or  my  words  cannot  alter  the  judgment  of  the  law 
to  make  that  irrevocable,  which  is  of  its  own  nature  revo- 
cable." Now,  taking  up  the  last  illustration  first,  while  it 
is  true  that  I  may  revoke  my  last  will  and  testament,  yet  if 
I  have  agreed  with  A.  B.  that,  in  consideration  of  her  dis- 
posing of  her  property  in  one  way,  I  will  dispose  of  mine  in 
another,  A.  B.  can  enforce  the  obligation  against  me  and 
I  can  enforce  the  obligation  against  her — equity  will  en- 
force the  mutual  wills  that  we  have  made  by  virtue  of 
such  an  agreement,  in  spite  of  a  revocation  by  either  of 


"P.  165.     As  to  the  effect  of  this  dictum  upon  later  Digesters 
see: 

March — "Actions  for  Slander  and  Arbitrements "  (1648),  p.  164 

et  seq. 
John    Wilson— "Law    Kelative    to    Arbitration"    (1793),    p.    57. 

"How  a  Submission  may  be  Eevoked. " 
Matthew    Bacon — "The    Compleat    Arbitrator;    or.    The    Law    of 

Awards"    (1770),  Sec.  IIL 
W.  H.  Watson — "Arbitration  and  Awards,"  pp.  36-44. 
Stewart  Kyd — "A  Treatise  on  the  Law  of  Awards,"  pp.  31  and 

32. 
"Cyclopedia  of  Law  and  Procedure,"  Vol.  Ill,  p.  610. 
Toledo  S.  S.  Co.  v.  Zenith  Transportation  Co.,  184  Fed.  Rep.  396, 

citing    Morse    on    Arbitration,    p.    437;    3    Cyc.    586,    604,   and 

Vynior's  Case,  4  Coke  (Part  vni)  302. 
Also  post,  pp.  128-141. 


94-  COMMERCIAL  ARBITRATION 

us.^*  Accordingly,  it  is  not  true,  at  least  in  our  day, 
that  a  last  will  and  testament,  "being  in  its  nature  re- 
vocable, may  never  be  made  irrevocable. ' '  All  of  the  other 
illustrations  relate  to  agencies,  either  to  make  livery  of 
seizin,  or  to  bring  suit,  or  to  take  an  account,  or  to  become 
a  factor;  and  lastly,  per  analogy,  arbitrations,  «&;c.  "or  if 
I  submit  myself  to  an  arbitrament."  Here  the  argument 
breaks  down. 

.The  failure  to  differentiate  between  a  power  and  a  con- 
tract is  pardonable  if  one  keep  in  mind  that  at  this  stage 
of  the  evolution  of  the  English  law,  there  was  no  clear 
appreciation  of  the  nature  of  the  mutual  and  reciprocal 
obligation  of  a  parol  contract  if  "the  God's  penny"  had 
not  passed.  The  old  judges  made  a  marked  distinction 
between  an  obligation  and  a  mere  promise  to  do  a  thing. 
Kyd  refers  to  this  distinction.^^  Says  he:  "In  the  year 
books,  a  distinction  is  taken  between  a  submission  by 
obligation,  and  a  submission  without  obligation.  In  the 
first  case  it  is  said,  that  the  obligor  cannot  discharge  the 
arbitrator,  because  he  is  bound  to  stand  to  his  award ;  but 
that  in  the  latter  it  is  otherwise."  At  this  point  Kyd  cites 
in  a  footnote  5  Edw.  IV.  3b.^°  But  he,  like  all  the  other 
WTiters,  prefers  the  opinion  of  Lord  C.  J.  Coke  in  Vynior's 
Case,  who,  he  says,  ' '  explains  this  distinction  in  this  way ; 
that  in  both,  eases  the  authority  of  the  arbitrator  may 
indeed  be  revoked ;  but  that  where  the  submission  is  with- 
out obligation,  the  party  revoking  loses  nothing;  whereas, 
in  the  other  case,  he  forfeits  the  penalty  of  his  bond ; 
for  by  countermanding  the  authority  of  the  arbitrators, 
he  has  not  fulfilled  the  condition,  by  standing  to,  and 
abiding  by  their  award ;  and  because,  when  a  man,  by  his 
own  act,  renders  the  condition  of  the  bond  impossible,  the 

^*See  Phillip  v.  Phillip,  160  N.  Y.  Supp.  624,  96  Misc.  471,  an 
interesting  opinion  by  .Tutlge  Rodenbeck.  See  also  Eastetter  v. 
Hoenninger,  214  N.  Y.  66. 

"Kyd  on  Law  of  Awards,  p.  31. 

"(See  post,  pp.  106-107. 


COKE'S  DICTUM  IN  VYMOR'S  CASE        95 

bond  becomes  single,  as  if  no  condition  had  been  annexed" 
— for  which  he  cited  Vynior's  Case.  This  reveals  unmis- 
takably the  source  of  the  doctrine  of  revocability. 

But,  says  Kyd:  "This  difference  in  the  effect  of  a 
revocation  in  the  two  cases,  was  certainly  good  law  at  the 
time,  when  it  was  held,  that  no  action  could  be  main- 
tained on  an  award  of  a  collateral  thing  made  in  conse- 
quence of  a  parol  submission;  hut  now  that  it  is  held,  that 
an  action  may  ie  maintained  on  such  an  award,  it  may 
reasonahly  he  supposed  the  courts  would  also  sustain  an 
action  on  the  case  for  countermanding  the  authority  of  the 
arhitrator."  ^'^ 

And  may  it  not  also  be  said  with  reason  that  the  pend- 
ency of  an  agreement  or  submission  to  arbitrate  is  a 
good  plea  to  an  action  by  one  who  breaches  the  agreement 
or  submission? 

Carrying  out  the  technical  distinction  of  his  day  be- 
tween an  obligation  and  a  mere  promise,  we  find  Coke  say- 
ing in  Vynior's  Case:  Where  "I  am  hound  to  stand  to  the 
award  which  J.  S.  shall  make,  I  could  not  discharge  that 
arbitrament,  because  I  am  bound  to  stand  to  his  award, 
but  if  it  be  without  ohligation  it  is  otherwise  .  .  .  for  ex 
nuda  suhmissione  non  oritur  actio." 

The  next  error  Coke  falls  into  is  in  treating  the  dele- 
gation of  power  to  the  arbitrator  as  an  appointment  of 
an  agent.  Of  course  this  is  a  false  analogy,  as  Lord 
Chancellor  Thurlow  saw  clearly.  In  1790  in  Calcraft  v. 
Eoehuck^^  he  said:  "It  is  not  uncommon  for  a  person, 
appointed  arbitrator,  to  consider  himself  as  agent  for 
the  person  appointing  him.  How  that  is  so  common  I 
wonder;  as  it  is  against  good  faith "^^  and  earlier  still, 
1762,  in  Common  Bench  (Wills  v.  Maccarmick,  2  Wilson, 

"  P.  32.    Italics  ours. 

"  1  Vesey,  Jr.  221,  at  p.  226. 

^See  also  Lord  Lonsdale  v.  LiUledale,  2  Vesey,  Jr.  451,  452  (1794), 
per  L.  Cb.  Loughborough;  and  FetJierstone  v.  Cooper  (1803)  per 
Lord  Ch.  Eldon,  9  Vesey,  Jr.  67,  67a. 


96  COMMERCIAL  ARBITRATION 

148,  149)  it  is  said  per  curiam  "an  award  is  a  judgment 
by  judges  chosen  by  the  parties  themselves." 

Besides,  Coke  was  misled  even  as  to  agency,  for  if  the 
agency  be  coupled  with  an  interest,  it  is  no  longer  "by 
its  very  nature  revocable" — it  has  become  by  a  man's 
action  irrevocable.  Take  any  of  our  factor  agreements, 
running  over  long  periods  and  involving  large  sums,  could 
the  principal  deprive  the  factor  of  his  profits,  by  an  act 
of  revocation  ?  ^° 

That  Coke  in  his  report  (8  Co.  82)  gave  undue  and 
unnecessary  prominence  to  his  dictum  of  the  revocability 
of  submission  (wandering  from  the  point,  as  Bacon  might 
say)  appears  from  two  other  reports  of  the  same  case  in 
Brownlow  and  Goldesborough 's  Reports  (Printed  in 
1651;  Second  Edition  1654)  under  "Actions  of  Debt." 

Part  1,  p.  62.  Wilde  versus  Vinor,  Trin.  7  Jac.  rotulo 
1629,  or  2629.  "Debt  upon  an  Obligation  to  perform 
an  Award.  The  Defendent  pleads,  that  the  Arbitrators 
made  no  Award;  the  Plaintiff  replies,  that  the  Defendent 
by  writing   did   revoke,   and   null   the   authority   of   the 

^  2  Manning  &  Granger 's  Eeports  55.  In  1840  in  Taylor  v.  Marling 
a  sum  of  money  was  deposited  with  one  Fisher  and  he  was  au- 
thorized to  arbitrate  and  settle  all  the  differences  between  the  par- 
ties and  pay  out  the  money  accordingly.  Before  his  award,  one 
of  the  parties  was  put  into  bankruptcy.  The  courts  were  asked  to 
hold  that  bankruptcy  was  a  revocation  of  the  submission,  but  they 
fail  to  find  any  authority  for  this  proposition — on  the  contrary  they 
hold  that  since  Fisher  was  ' '  a  stakeholder ' '  as  well  as  an  arbitrator, 
it  was  a  power  coupled  with  an  interest — "though  the  plaintiff  did 
not  absolutely  place  money  (Italics  the  Court's)  in  the  hands  of 
Fisher"  but  instead  "gave  a  valuable  consideration  for  the  3500£ 
being  so  deposited  in  relinquishing  his  right  to  take  out  execution  on 
the  warrant  of  attorney.  Each  party  luid  an  interest  in  the  fund, 
dependent  upon  the  contingencies  of  an  award  being  made  wholly 
or  partially  in  his  favour."     (Italics  ours.) 

' '  But,  whore  an  authority  or  power  is  coupled  with  an  interest, 
or  where  it  is  given  for  a  valuable  consideration,  or  where  it  is  a 
part  of  a  security,  there,  unless  there  is  an  express  stipulation,  that 
it  shall  be  revocable,  it  is,  from  its  own  nature  and  character,  in 
contemplation  of  law,  irrevocable,  whether  it  is  expressed  to  be  so 
upon  the  face  of  the  instrument,  conferring  the  authority,  or  not. ' ' 
(Story  on  Agency,  Sec.  4  77.) 


COKE'S  DICTUM  IX  VYNIOR'S  CASE        97 

Arbitrators.  Foster  held  the  Bond  was  forfeited,  al- 
though he  might  revoke,  the  Plea  was,  that  he  did  dis- 
charge the  Arbitrators  against  the  form  of  the  Condition. 
My  Lord  Coke  held,  that  the  power  was  countermand- 
able,  if  the  Submission  be  by  writing,  the  countermand 
must  be  by  writing,  if  by  word  I  may  countermand  by 
word :  If  two  bind  themselves,  one  cannot  countermand 
alone.  If  Obligor,  or  Obligee  disable  by  their  own  act  to 
make  the  Condition  void,  the  Bond  is  single,  14.  II.  7. 
If  I  am  bound  to  infeoff  A  and  I  marry  her  before  the 
day,  the  Bond  is  forfeited,  18.  E.  4.18.20.  the  great  doubt 
was;  because  no  express  notice,  but  notice  was  implied. 
And  the  Bond  forfeited,  because  he  did  not  stand  to  it. 
Judgement  for  the  Plaintiff." 

Again,  as  Vivion  (sic)  against  Wilde: 

Part  II,  p.  290.  "A  Man  was  bound  in  an  Obligation 
to  another  with  Condition  to  stand  to,  abide,  and  per- 
form the  award  of  two  Arbitrators,  and  before  award, 
by  his  writing  the  Obligor  revoked  the  Authority  of  one 
of  the  Arbitrators:  and  it  was  agreed  by  all,  that  this 
Obligation  is  become  single  without  Condition;  and  yet 
it  was  not  pleaded  that  the  Arbitrator  had  notice  of  the 
Revocation  before  the  award  made:  And  yet  for  that  it 
was  pleaded,  that  Revocamt,  it  was  agreed  that  that  im- 
plies notice,  for  without  notice  it  is  no  Revocation ;  But  it 
was  agreed,  that  if  a  man  submit  himself  to  the  award 
of  another,  and  after  he  revokes  his  Authority:  But  be- 
fore the  Arbitrator  had  notice  of  that,  he  makes  the 
award,  the  award  is  good  and  shall  be  performed ;  so  if  a 
man  make  a  Feoffment,  and  Letter  of  Attorney  to  make 
Livery:  And  before  Livery  made  he  revokes  the  power 
of  the  Attorney:  But  before  notice  the  Attorney  makes 
Livery,  this  is  good,  but  if  the  Feoffer  makes  a  Lease  or 
Feoffment  to  another  before  the  Livery  made  by  the  other, 
this  is  a  Countermand  in  Law,  and  shall  be  good  with- 
out notice,  for  Fortior  est  dispositia  legis  quam  hominis: 


98  COMMERCIAL  ARBITRATION 

But  where  a  man  makes  actual  Revocation  of  the  Au- 
thority, and  before  notice,  the  other  executes  his  Au- 
thority, and  in  pleading  the  other  pleads;  Quod  revocavit, 
the  other  party  may  reply,  Quod  non  revocavit ^  and  give 
in  evidence  that  he  hath  no  notice  of  that  before  the  ex- 
ecution of  his  Authority,  and  this  is  good,  for  without 
notice  it  is  no  revocation,  where  revocation  is  the  act 
of  the  party :  The  Case  is  entred.  Trinity  7,  Jacohi  Botulo 
2629.    Vivion  against  Wilde." 

The  real  decision  of  the  case,  accordingly,  is  upon  two 
propositions — 

(a)  The  liability  on  the  bond  matures  if  the  submis- 
sion is  revoked; 

(b)  Though  notice  of  revocation  to  the  arbitrator  is 
necessary,  it  is  implied  in  the  pleading  "He  revoked," 
etc. 

That  this  is  the  true  explanation  of  the  decision  is 
further  established  by  study  of  another  case — four  years 
later  (1613) — where  Coke  led  the  court,  in  Common  Pleas 
(10  Jaeobi).  The  ease  is  that  of  The  Lord  Mounteagle  v. 
Penruddock,  and  is  to  be  found  in  Godbolt's  Reports 
(1613),  p.  185,  where  "it  was  holden  by  the  whole  Court 
in  this  case,  and  agreed  by  all  the  Serjeants  at  the  Barre, 
That  if  two  men  submit  themselves  to  the  arbitrament  of 
I.  S.  And  the  Arbitrator  doth  award,  that  one  of  them 
shall  pay  ten  pound,  and  the  other  shall  make  a  release 
unto  him,  that  the  same  is  a  void  Award,  if  the  submission 
he  not  hy  Deed;  ^^  and  he  to  whom  the  Release  is  to  be 
made  by  the  Award,  may  have  remedy  for  it,  for  other- 
wise the  one  should  have  the  ten  pound,  and  the  other 
without  remedy  for  the  Release."  (You  could  sue  in  as- 
sumpsit for  the  £10,  but  you  could  not  compel  the  delivery 
of  the  release.) 

"And  it  was  resolved,  That  upon  submission  and  ar- 

"  Italics  ours. 


COKE'S  DICTUM  IN  VYNIOR'S  CASE        99 

bitrament,  that  the  party  may  have  an  Action  upon  the 
Case  for  not  making  of  the  Release. 

"And  Cook  (Coke)  chief  Justice  said,  That  it  was 
wisely  done  by  Manwood,  chiefe  Baron,  when  he  made 
such  award,  That  a  Lease  or  such  like  Collateral!  thing 
should  be  done,  to  make  his  Award,  that  he  should  make 
the  Release,  or  pay  such  a  sum  of  money,  for  which  the 
part}^  might  have  a  remedy.  I  conceive,  that  the  reason 
is,  That  no  Action  upon  the  case  upon  an  Arbitrament 
lieth;  because  it  is  in  the  Nature  of  a  Judgement.  At 
another  day,  the  opinion  of  the  Court  was  with  Cook, 
and  20  H.  6.  and  8  E.4.5  cited  to  the  purpose,  that  there 
ought  to  be  reciprocall  remedy."  The  case  in  20  H.  6 
to  which  reference  is  made  is  reported  in  Y.  B.  20  H.6. 
18  (1442)  of  which  there  are  three  different  abridgments 
(Statham,  Klingelsmith  trans.  12;  Fitzherbert  Arb.  8,  and 
Brooke,  Arbit.  3). 

A  study  of  the  case  and  of  the  three  abridgments  shows 
that  each  abridgment  differs  from  the  other  and  all  three 
from  the  case  itself.  Nevertheless,  we  can  gather,  by  piec- 
ing them  all  together,  that  the  Court  decided  that  an 
arbitrament  by  which  the  arbitrator  held  that  both  par- 
ties should  exchange  releases  and  one  should  in  addition 
pay  to  the  other  100  M  was  a  good  plea  to  an  action  in 
trespass,  though  Newton  had  great  difficulty  in  determin- 
ing how,  if  one  party  delivered  the  release  and  the  other 
did  not,  the  first  man  could  compel  the  delivery  by  the 
second.  March  cites  this  case  for  the  proposition  that 
"It  is  a  good  Award,  that  because  that  the  one  party 
hath  done  more  trespass  to  the  other,  then  the  other  to 
him,  that  he  shall  give  a  penny  in  satisfaction,  and  that 
the  other  shall  be  quit  against  him."" 

The  judges  of  those  days  had  great  difficulty  in  enforc- 
ing an  award  where  one  party  was  required  to  give  a 
release  and  the  other  was  to  pay  money,  or  where  the 

^^  March:   "Slander  and  Arbitrement,"  p.  208. 


100  COMMERCIAL  ARBITRATION 

submission  was  not  under  seal.  How  could  you  compel 
the  delivery  of  the  release,  or  how  could  a  thing  not 
under  seal  have  any  enforceable  value? 

In  Tilford  v.  French,  15  Car.  II  in  B.  R.^^  (1664),  in  a 
suit  for  Debt  for  £50,  it  is  alleged  that  the  plaintiff  and 
the  defendant  mutually  submitted  to  the  award  of  J.  S., 
who  awarded  that  the  defendant  should  pay  the  plain- 
tiff £50  and  the  plaintiff  on  payment  thereof  should  de- 
liver to  the  defendant  certain  writings  and  also  "make 
to  him  a  Release."  The  Court  held  the  award  void,  "For 
that  the  Defendant  had  no  Remedy  for  the  Writings 
and  the  Release  upon  this  parol  Submission";  the  court 
did  not  consider  the  remedy  of  specific  performance.  But 
the  reason  given  is:  This  parol  suhmissiori  "did  not 
imply  any  Promise  to  perform  it,  and  so  it  is  an  Award  of 
one  Part  only."  So  Viner  cites  this  case  (also  reported  in 
1  Keb.  635)  for  the  proposition  that  "mutual  submission  is 
no  promise  itself,  hut  only  an  evidence  of  it." 

But  studying  the  more  complete  report  of  the  case  in 
1  Keble  599,  we  find  that  Jones  for  the  plaintiff  ar- 
gued :  * '  This  is  a  reciprocal  promise,  and  therefore  per- 
formance need  not  be  averred;  nor  that  the  Submission 
was  by  Bond  on  promise,  .  .  .  and  in  such  case,  it  need 
only  be  said  that  they  mutually  submitted."  Winning- 
ton  for  the  defendant  cited  Mounteagle  v.  Penruddock 
as  "the  very  case  in  point"  which  "hath  been  adjudged 
for  the  cause,  that  no  remedy  can  be  had  for  the  Release." 
So  here,  the  decision  is  not  that  the  award  is  void,  as 
we  gather  from  Levinz's  report  and  Viner 's  abridgment 
of  the  case,  but  it  is  "resolved,  no  Action  upon  the  Case 
lieth  on  such  a  Submission,  the  remedy  being  only  on  the 
Judgment  of  the  Arbitrators.  .  .  .  The  Plaintiff  ought  to 
discontinue,  or  go  to  new  Trial  in  Action  upon  the  Case 
on  special  promise."  And  though  by  Hyde  and  Curiam 
it  is  said  "the  Mutual   Submission  is  no  promise  in  it 

■*  Reported  in  1  Levinz,  at  p.  113, 


COKE'S  DICTUM  IN  VYNIOR'S  CASE      101 

self^  but  only  an.  Evidence  of  it,"  the  real  difficulty  of 
the  Court  is  one  of  pleading,  for  "without  express  prom- 
ise (alleged),  no  Action  upon  the  Case  lieth  in  Debt, 
it  teing  long  hefore  such  promise  was  created  (meaning, 
we  assume,  the  doctrine  of  promise  implied  from  recip- 
rocal obligations)  which  is  tiot  to  he  extended;  and  there- 
fore it  self  it  will  not  create  any  promise,  though  it  he 
evidence  of  it."    (Italics  ours.) 

The  judges  were  in  these  days  troubled  by  another 
point.  Was  an  award  of  as  high  a  legal  nature  as  an 
"obligation"  (i.  e,  a  Deed  or  Instrument  under  seal)  ?  So 
Viner  says:^*  "When  a  Duty  accrues  by  the  Deed  in 
Certainty,  tempore  Confectionis  Scripti,  as  by  Bill,  there 
is  a  certain  Duty  and  it  takes  its  Essence  and  Operation 
originally  and  only  by  Writing;  and  therefore  in  Debt 
thereupon  an  Award  is  no  Plea"  (citing  Co.  6.  Blake  43.b). 
So  in  Morris  against  Creach  ^^  22  Car.  II  in  B.  R.  (1671), 
where  the  suit  is  in  "Debt  on  an  Obligation  by  three  Ex- 
ecutors" to  which  the  defendant  pleads  that  the  parties 
having  submitted  to  arbitration  of  all  the  differences,  it 
was  awarded,  "That  the  Defendant  should  be  quit  of  the 
Obligation. ' '  Now,  here  was  a  pretty  point :  Could  an  ob- 
ligation under  seal  be  discharged  by  an  award  of  ar- 
bitrators? Upon  the  plaintiffs'  demurrer  to  the  Plea, 
the  Court  held,  "That  an  Obligation  by  itself  is  not  sub- 
mittable,  because  it  is  a  Debt  certain,  otherwise  it  is  as 
here,  where  it  is  submitted  among  other  Things."  Ac- 
cordingly— because  the  obligation  was  only  one  of  the 
matters  submitted  to  arbitration,  "Kelynge  and  Twysden 
held  the  Plea  good,  notwithstanding  the  Controversies  were 
only  between  one  of  the  Plaintiffs  and  the  Defendant ; ' '  but 
Moreton,  with  more  conservatism,  "doubted,  not  only  for 
the  said  Reason,  but  also  for  that  an  Arbitrament  is  not 
of  so  high  a  Nature  as  an  Obligation,  and  therefore  can- 

"  Viner '9  Abridg.  103. 
"'I  Levinz's  Eep.  292. 


102  COMMERCIAL  ARBITRATION 

not  be  a  Bar."  But,  says  Levinz,  annotating  the  case: 
"See  45  Ed.  3.16  an  Opinion,  That  an  Award  by  Deed 
is  pleadable  in  Bar  of  an  Obligation.  But  1  Rolle  270  is 
an  Opinion  to  the  contrary."  And  Viner  cites  4  Hen. 
6.  18  and  10  Hen.  7.4  in  addition  to  Moreton  for  the 
statement  that  "In  debt  upon  an  Obligation,  an  Award 
is  no  plea." 

The  formality  of  pleading  at  the  time  is  illustrated 
by  a  case  in  3  Croke,  577-8,  where  in  Trinity  Term,  18 
Jac.  1,  1622,  a  plea,  that  an  award  by  arbitrators  was 
delivered  at  a  place  other  than  the  one  mentioned  in 
the  submission,  was  good,  "for,"  as  Doderidge  and  Hough- 
ton, J.  J.,  say,  "it  is  reason  it  should  be  published 
and  ready  to  be  delivered  at  the  places  appointed  where 
the  parties  are  to  expect  it,  and  not  at  any  other  place; 
for  the  parties  have  not  by  intendment  any  cognizance 
of  such  delivery;  and  there  being  a  day  and  place  ap- 
pointed, they  needed  not  to  seek  it  in  other  places,  nor 
to  take  cognizance  of  such  delivery." ^^  "But  Montague, 
Chief  Justice,  held,  that  this  publication  there,  and  the 
allegation  that  it  was  adtimc  et  ibidem  ready  to  be  deliv- 
ered at  the  said  shop  in  the  Exchange,  was  sufficient." 

"Coke,"  says  Maitland,^^  "could  look  back  to  Edward 
III 's  day  as  to  a  golden  age  of  good  pleading. ' '  In  Coke 's 
day  "Times  of  inventive  liberality  alternated  with  times 
of  cautious  and  captious  conservatism. ' '  ^^ 

"'This  is  contrary  to  the  earlier  decision  in  8  Ed.  IV,  10  (1469), 
see  post,  pp.  115-116. 

"  Encyclopaedia  Britannica,  11th  ed..  Vol.  9,  p.  603,  art.  ' '  English 
Law." 

""Ibid. 


CHAPTER  IX 

THE  EARLIER  PRECEDENTS  CONTRA  TO  COKE'S  DICTUM 

But  according  to  the  earlier  precedents,  was  a  sub- 
mission or  agreement  to  arbitrate  revocable  at  the  pleas- 
ure of  either  of  the  parties?  Bracton  in  his  Note  Booh 
cites  ^  three  cases  involving  arbitration — one  in  1224,  one 
in  1231  and  one  in  1233 — all  decided  during  the  reign 
of  Henry  III  (1216-1272),  where  the  awards  made  by 
arbitrators  were  enforced  by  the  courts  at  law  upon  proof 
of  the  "conventions,"  or  whatever  document  was  given, 
under  which  the  parties  "put  themselves  upon  an  arbitra- 
ment." In  a  footnote  to  her  translation  of  Statham's 
Abridgment  of  the  Law,  Klingelsmith  saysr  "That  there 
was  an  early  custom  for  litigants,  or  prospective  litigants, 
to  agree  to  arbitrate  the  matters  in  dispute  between  them, 
is  shown  by  some  very  early  cases.  Bracton  (Note 
Book,  f.  649)  has  a  case  of  a  very  early  date  (1231), 
another  in  1233  (732),  and  another  in  1224  (983);  all 
rather  uninteresting  cases,  which  in  no  way  indicate  that 
there  was  anything  novel  about  the  proceeding.  These 
cases  show  us  nothing  in  regard  to  the  procedure  at  that 
time.  It  was  probably  entirely  informal,  and  yet  it  was 
necessary  to  prove  the  ' conventmie'  or  whatever  it  was 
by  which  they  'put  themselves  upon  an  arbitrement.'  In 
the  second  case  in  Bracton  (N.  B.  732)  (1233)  one  'profert 
quoddam  scriptum  quod  hoc  iestatur/  and  his  opponent 
also  offered  another  writing  which  showed  a  later  agree- 
ment, changing  the  conditions,  and  the  latter  writing  was 

*  Bracton 's  * '  Note  Book, ' '  Maitland.     Folios  983,  649  and  732. 
»P.  123. 

103 


104  COMMERCIAL  ARBITRATION 

apparently  accepted.  The  first  case  in  Bracton  (N.  B. 
649)  (1231)  shows  both  parties  producing  their  secia, 
which  proves  sufficient,  but  the  defendant  produces  also 
'literas  petentes';  they  do  not  seem  to  have  a'ay  effect 
upon  his  cause,  however.  The  third  case  is  an  entirely 
different  proceeding  (N.  B.  984)  in  which  the  final  agree- 
ment seems  to  be  put  into  the  hands  of  arbitrators,  two 
of  whom  were  justices  sitting  on  the  case."  By  refer- 
ence to  Bracton^  we  find  that  the  first  of  the  three  cases 
mentioned  by  Klingelsmith,  the  one  decided  in  1231,  is 
unusually  instructive.*  Willelmus  de  la  Mare,  or,  per- 
haps, William  of  the  Sea,  brings  a  suit  in  which  he  prays 
that  Simoni  de  Chelefeuldia  shall  pay  him  damages  in  the 
amount  of  thirty  marks  for  a  rick  of  hay  which  had,  he 
claimed,  deteriorated.  Simon  pleaded  that  the  case  was 
one  for  "placitum  in  curia  cristianitatis  de  catallis"  (lit- 
erally, a  peaceful  Christian  court),  by  virtue  of  an  agree- 
ment entered  into  by  both  the  parties  to  submit  the  con- 
troversy to  arbitration  (compromiserunt  se  in  arhitros). 
The  plaintiff  contended  that  the  agreement  of  arbitration 
was  not  adequate  to  compel  him  to  submit  his  differences 
(sectam  .  .  .  non  est  sufficiens)  and  that  he  was  entitled 
to  his  day  in  the  King's  Court.  But  Simon  produced  a 
second  instrument,  which  he  said  had  been  drawn  up 
later,  and  claimed  that  in  troth,  by  mutual  consent,  Simon, 
as  much  as  William,  was  bound  to  abide  by  the  award  of 
arbitrators  and  both  had  renounced  the  privilege  of  the 
forum  {set  reuera  de  communi  consensu  tarn  ipsius  Si- 
monis  quam  Willelmi  compromiserunt  se  in  arhitros).  Si- 
mon contended  that,  though  the  first  instrument  might 
not  be  valid,  the  secta  subsequently  executed,  which  he 
produced  and  exhibited  to  the  court,  required  the  deter- 
mination of  the  controversy  in  a  "peaceful  Christian  tri- 

•Maitland's  Edition  of  Bracton 's  "Note  Book"  waa  issued  only 
in  1887. 
*Fol.  649.     Vol.  II  of  Maitland's  Edition,  p.  499. 


CONTRA  TO  COKE'S  DICTUM  105 

bunal"  and  that,  if  the  King's  Court  decided  the  matter, 
both  parties  would  be  deprived  of  this  method  of  deter- 
mination. The  concluding  sentence  in  Bracton's  "Note 
Book"  is:  " Et  prohibitum,  est  etc."  Or,  as  we  under- 
stand it,  William  was  enjoined  and  prohibited  from  prose- 
cuting his  suit  before  the  King's  Court. 

Klingelsmith  also  refers  (Footnote  11,  p.  123)  to  a 
quotation  from  West's  Symbolography,  title  "Compromise 
and  Arbitration,"  Pt,  2,  p.  164,  §21 — evidently  a  very- 
early  authority,  of  which  we  have  not  been  able  to  find 
a  copy — for  this  proposition:  "Arbitration  is  an  extraor- 
dinary judge,  which  is  chosen,  and  hath  power  to  judge 
given  to  him  by  the  only  mutual  consent  ...  to  the  end 
they  may  decide  their  controversies."  She  concludes,  on 
the  basis  of  the  case  in  49  Edw.  Ill,  which  is  her  Note 
2  to  the  title  "Arbitrament"  in  Statham,  that  "the  sub- 
mission to  an  arbitrator  could  be  without  deed  ..."  and 
though  "the  early  cases  in  the  Note  Book  show  us 
nothing  of  the  process,  except  that  it  seemed  to  be  a 
well  established  method  of  settling  disputes  between  two 
persons,"  Kyd,  says  she,  "after  crediting  the  principles 
of  the  English  law  to  the  influence  of  Roman  law,  says 
that  it  is  not  'easy  to  say  at  what  precise  period  they 
were  adopted  here,  or  whether  they  were  admitted  at  once, 
or  by  degrees,  as  a  component  part  of  our  practical  sys- 
tem. In  the  most  ancient  repositories  of  the  decisions 
of  our  courts  [the  Year  Books],  the  greater  part  of  them 
are  mentioned  as  known  and  uncontroverted  vested 
law. '  "  °  Upon  which  Klingelsmith  quotes  something  very 
modem  in  its  tone  and  yet  quite  old  in  its  substance: 
"Here  (arbitration)  is  a  tool  of  the  law,"  says  she  "a 
convenient  and  much  used  tool;  one  which  in  various 
altered  forms  has  come  down  to,  and  become  a  part  of, 
our  modern  law,  but  we  have  no  history  of  its  rise,  its 
growth,   its   permutations   and   reincarnations.     It  is   in 

"Kyd  on  Awards,  pp.  3,  4. 


106  COMMERCIAL  ARBITRATION 

the  'most  ancient  repositories  of  our  law'  full-grown  and 
attired  in  correct  costume. ' '  ^  Fitzherbert  's  Abridgment 
(1577)  confirms  the  citations  made  in  the  footnotes  of 
Klingelsmith's  English  translation  of  Statham  (1475). 

If  arbitration  was  so  early  and  so  much  a  part  of  the 
"known  and  iincontroverted  law"  to  be  found  "in  the 
most  ancient  repositories  of  the  decisions  of  our  courts," 
how  came  it  to  be  so  arrested  in  its  development  as  part 
of  the  English  Common  Law?  The  answer  is  clear.  An 
analysis  of  the  authorities  discloses  that  the  original  au- 
thority for  the  more  modern  statements  of  the  revoca- 
bility  of  agreements  to  submit  to  arbitration  is  Coke  in 
Vynior's  Case.  March  states  as  an  apparently  incon- 
trovertible legal  proposition  the  countermandability  of 
arbitrators,  and  says  that  ^'The  last  and  hest  authority 
is  Vinyors  Case,  where  it  is  resolved,  That  though  a  man 
be  bound  to  stand  to  the  Arbitrament,  &c.  yet  he  may 
countermand  the  Arbitrators."  The  reason  March  gives 
is  because  "a  man  cannot  by  his  own  act  make  such  an 
authority,  power  or  warrant;  not  countermandable,  which 
by  the  Law  and  its  own  proper  nature  is  countermandable 
.  .  .  " — reasoning  almost  verbatim  reproduced  from 
Vynior's  Case.  We  have  already  seen  that  this  reasoning  is 
no  part  of  the  decision  of  Vynior  's  Case  and,  as  we  now  re- 
gard legal  decision,  is  mere  obiter  dicta.  The  other  au- 
thority upon  which  March  relies  is  Brooke.  It  will  be  seen 
from  the  translation  of  Brooke,  and,  indeed,  from  March's 
own  text,  that  Brooke's  reliance  is  on  5  E.  4.  "where  it 
is  said,  That  if  a  man  be  bound  to  stand  to  the  Arbitre- 
ment  of  J.  N.  he  cannot  discharge  the  Arbitrator;  con- 
trary if  he  were  not  bound  to  stand  to  his  Arbitrement: 
yet,"  says  March,  "Brook  upon  this  Case  saith,  That  it  is 
clear  that  he  may  discharge  the  Arbitrator  in  both  cases; 
but  in  the  one  case  he  shall  forfeit  his  Bond ;  in  the  other 
he  shall  lose  nothing,  because  ex  niida  s-ubmissione  non 

•Klingelsmith's  Statham 's  "Abridgment  of  tlie  Law,"  p.  124. 


CONTRA  TO  COKE'S  DICTUM  107 

oritur  actio.  ..."  But,  when  we  come  to  examine 
Brooke,  we  find  that  all  he  actually  says  upon  5  E.  4 
— the  case  to  which  March  refers — is:  "Note.  Where  a 
man  is  hound  to  abide  by  the  arbitrament  of  J.  N.,  he 
cannot  discharge  the  arbitrator.  Contrary,  if  he  was 
not  bound  to  abide  by  his  arbitrament  tamen  videt  clearly 
that  he  can  discharge  the  arbitrator  in  the  one  case  and 
in  the  other  (italics  ours)  but  he  shall  forfeit  his  bond." 
There  is  nothing  from  which  a  deduction  may  be  made 
such  as  is  made  by  March:  i.  e.,  "he  shall  lose  nothing, 
because  ex  nvda  suhmissione  non  oritur  actio,"  and  all 
that  there  is  to  the  report  in  the  Year  Book  itself  (5  Edw. 
4.3.)  is  the  following:  "If  I  am  bound  to  abide  by  the 
award  which  J.  S.  shall  render,  I  cannot  discharge  the 
arbitrament  because  I  am  bound  to  abide  by  his  award, 
but  if  it  is  without  bond  it  is  otherwise. ' '  ^  The  entire 
case  consists  of  about  a  line  and  a  half  and  we  have 
quoted  and  translated  all  there  is  to  it.  There  is  no 
means  of  determining  the  nature  of  the  suit,  or  of  the 
defense,  or  whether  or  not  there  had  been  an  arbitrament ; 
though  it  may  be  inferred  that  at  this  time,  unless  a  bond 
was  given,  no  action  would  lie,  because,  as  we  have  al- 
ready seen,  there  was  no  such  thing  as  an  action  for 
breach  of  an  executory  contract  resting  upon  parol  prom- 
ise.^ We  get  the  key  to  the  contemporary  reasoning  in  the 
expression  in  March:  "because  ex  nuda  siihmissione  non 
oritur  actio."  Obviously,  if  you  gave  a  bond  conditioned 
upon  the  happening  of  an  event,  the  bond  being  under  seal, 
there  was  a  valid  obligation;  and  if  the  event  did  not 
transpire  your  rights  matured  upon  the  bond.  But  if  there 
was  no  bond,  there  was  no  obligation. 

March  does  not  refer  to  Fitzherbert's  Abridgment, 
which,  it  will  be  recalled,  was  published  in  1577,  nor  to 
Statham's,  published  about  1470.    But  Statham  had  dis- 

'  See  ante,  pp.  53-54. 

'See  Kyd  on  "The  Law  of  Awards,"  p.  31. 


108  COMMERCIAL  ARBITRATION 

cussed  arbitration:  "2.  If  the  parties  put  themselves  into 
an  arbitration  without  a  deed,  they  can  discharge  the 
arbitrators  without  a  deed  before  the  day,  etc.,  or  they 
can  put  off  the  day  by  the  assent  of  both,  without  a  deed. 
But  if  the  submission  be  by  deed  it  is  otherwise:  by 
Fynchendon,  in  Debt,  etc.,  for  he  should  be  discharged 
by  both  parties  by  deed.  Reported  in  Y.  B.  Hilary,  49 
Ed.  Ill,  p.  8,  pi.  U.  See  also  Fitzh.  Arbitrement  22. " » 
In  other  words,  Statham  claimed  that  if  an  arbitrament 
were  made  by  deed,  the  parties  could  only  discharge  the 
arbitrators  by  another  deed,  although  they  could  put  off 
the  day  of  the  arbitration  by  mutual  consent  without  a 
deed. 

Here  is  a  vivid  illustration  of  the  effect  of  formality 
upon  the  legal  mind.  If  you  reduced  your  submission 
to  the  form  of  a  deed  of  submission,  or  if  you  accom- 
panied your  agreement  (to  arbitrate)  with  a  bond,  you 
were  safe  and  sound.  Your  obligor  could  not  cancel  the 
bond  even  with  your  assent  save  by  another  instrument 
of  equal  solemnity.  You  could  not  cancel  a  deed  except  by 
deed.  But  if  you  merely  had  a  contract — a  contract  to 
submit  to  arbitration,  and  no  formal,  binding  obligation 
under  seal  to  abide  by  the  result,  you  had  something 
*'ex  niida."  "The  contracts  enforced  by  the  civil  courts," 
says  Holmes,  ''even  as  late  as  Henry  II  were  few  and 
simple."^" 

Holmes  has  outlined  three  stages  in  the  development 
of  the  doctrine  of  consideration.^^  "So  far  as  parol  con- 
tracts were  concerned,"  the  action  of  debt  "could  only 
be  used  where  the  consideration  was  a  benefit  actually 
received  hy  the  promisor."  ^^  Ordinarily,  an  agreement  to 
arbitrate  conferred  neither  benefit  upon  the  obligee  nor 


•Klingelsmith's  "Statham,"  p.   117. 
"Holmes:   "The  Common  Law,"  p.  259. 
"  Ibid.,  p.  267  et  seq. 
"Ibid.,  p.  271.     Italics  ours. 


CONTRA  TO  COKE'S  DICTUM  109 

detriment  upon  the  obligor.  It  was  not  until  much  later 
that  a  promise  was  considered  sufficient  benefit  or  detri- 
ment to  support  the  contract.  Holmes  also,  as  does  ^^  Page, 
refers  to  the  curious  case  in  Henry  IV 's  time  where  it 
was  said  that  if  a  man  undertook  to  make  repairs  on 
another's  house  and  by  his  unskillfulness  spoiled  his  em- 
ployer's timbers,  an  action  of  trespass  on  the  case  would 
lie.  Yet  the  "action  could  not  have  been  maintained  for 
a  simple  refusal  to  build  according  to  agreement ;  but  it 
was  suggested  by  the  court  that,  if  the  writ  had  men- 
tioned 'that  the  thing  had  been  commenced  and  then 
by  negligence  not  done,  it  would  have  been  otherwise. '  "  ^* 
Again,^^  says  Holmes:  "But  it  cannot  be  denied  that  the 
allegation  of  an  undertaking  conveyed  the  idea  of  a  prom- 
ise, as  well  as  that  of  an  entering  upon  the  business  in 
hand.  Indeed,  the  latter  element  is  sufficiently  conveyed, 
perhaps,  without  it.  It  may  be  asked,  therefore,  whether 
the  promise  did  not  count  for  something  in  raising  a  duty 
to  act.  So  far  as  this  involves  the  consequence  that  the 
action  was  in  fact  for  the  breach  of  a  contract,  the  an- 
swer has  been  given  already,  and  is  sustained  by  too  great 
a  weight  of  authority  to  be  doubted.  To  hind  the  defend- 
ant hy  a  contract^  an  instrument  under  seal  was  essential." 

Holmes  gives  it  as  the  result  of  his  study  that  "At  the 
beginning  of  the  reign  of  Henry  VI  it  was  probably  still 
the  law  that  the  action  would  not  lie  for  a  simple  failure 
to  keep  a  promise. ' '  ^® 

Keeping  in  mind  these  intricacies  in  the  evolution  of 
the  law,  we  shall  now  turn  to  the  Year  Book  cited  by 
Statham,  where  we  find  a  case  decided  235  years  before 
Vynior's  Case,  not  discussed  by  Brooke,  nor  by  March, 
nor  distinguished  by  Coke  in   Vynior's  Case,  although  it 

"Ante,  p.   63. 

"Holmes,  p.  277,  citing  Y.  B.  2  Hen.  IV,  3,  pi.  9;  11  Hen.  IV,  33, 
pi.  60;   Cf.  3  Hen.  VI,  36,  pi.  33. 
"76id.,  p.  280.     Italics  ours. 
"Ibid.,  p.  282. 


110  COMMERCIAL  ARBITRATION 

is  cited,  a  case  which  is  a  clear  and  unmistakable  au- 
thority contrary  to  the  doctrine  stated  by  Coke. 

In  1375  (Hilary  Term,  49  Edw.  Ill)  Brode  brings  an 
action  of  debt  against  de  Ripple  "  for  one  hundred  marks 
on  a  bond,  accompanied  by  a  deed,  which  provided  that 
the  plaintiff  and  defendant  should  submit  to  the  arbi- 
tration of  Roger  Digge  and  three  others  on  a  certain  day 
at   Cambridge,   and   in   case   these   arbitrators   could   not 

"Erode  v.  de  Bipple,  Y.  B.  49  Ed.  Ill,  8  and  9   (1375).     Debt. 

John,  son  of  John  Brode,  brings  a  writ  of  debt  against  Stace 
de  Eipple  and  asks  for  lOOM  on  a  bond.  Hasty:  He  should  not 
have  an  action,  for  we  tell  you  that  this  same  John  who  is  plain- 
tiff, by  this  deed  indented  which  is  here,  we  are  bound  to  the  accord 
and  arbitrament  of  Roger  Digge,  and  three  others,  on  a  certain  day 
at  Cambridge,  provided  they  can  agree,  and  if  not,  the  arbitrament 
of  Martin  Petit,  who  should  be  elected  umpire  in  the  manner  afore- 
said, to  arbitrate  certain  lands  and  tenements  which  the  said  J. 
Brode  claimed  against  the  said  J.  Stace  in  the  Court  of  our  Lord 
the  King;  that  the  said  bond  of  lOOM  shall  lose  its  force,  but  if 
they  cannot  agree,  as  is  said  above,  that  the  said  John  may  prosecute 
his  action  in  the  Court  of  our  Lord  the  King,  as  he  did  before; 
and  we  say  that  we  came  to  Cambridge  on  that  very  day  and  the 
arbitrators  came  and  could  not  agree;  nor  did  anything,  nor  the 
umpire  either.  Therefore,  there  is  no  default  in  us,  for  which  we 
ask  judgment,  if  by  force  of  the  deed  he  can  have  action  against 
us  or  ask  nothing. 

Persay:  Sir,  you  see  clearly  how  the  bond  is  simple  in  itself,  and 
the  deed  which  is  put  forward  in  defeasance  of  the  bond  holds  that 
if  he  abides  by  the  arbitrament  of  certain  people  that  the  deed 
would  lose  its  force  and  he  has  not  alleged  that  he  was  ready  and 
that  he  is  still  ready  to  abide  by  their  arbitrament.  That,  therefore, 
we  conclude  that  even  if  they  did  not  arbitrate  on  a  certain  date, 
they  could  arbitrate  on  another  day,  and  you  have  never  excused 
yourself  for  all  time.  Therefore,  the  bond  is  effectual  in  toto. 
Wherefore  we  ask  judgment.     And  pray  for  debt  and  our  damages. 

Hasty:  But  since  the  deed  states  in  it  a  certain  day  on  which 
they  should  arbitrate  and  we  have  said  that  they  did  not  agree  nor 
arbitrate,  therefore,  there  was  no  default  in  us  and  this  matter 
(procedure)  we  do  not  ask.  We  ask  judgment  and  pray  that  it  will 
be   (a)    bar  he  does  not  deny. 

Belknap  (Judge) :  If  a  man  is  bound  by  a  deed  to  pay  a  certain 
sum  of  money  on  a  certain  day  in  defeasance  of  a  bond  to  a  great 
sum,  if  the  obligee  brings  a  writ  of  debt  for  the  sum  stated  in  the 
bond,  I  say  that  even  if  the  defendant  alleged  that  he  proffered  on 
that  day  a  lesser  sum  than  stated  in  the  deed  on  the  day  stated  in 
the  deed,  if  he  does  not  allege  that  lie  was  ready  thereafter  and 
is  still  proffering  the  moneys  at  the  bar  (i.  e.  keeps  up  the  tender 
by   tendering  in  court)    he  will  not  be  excused  of    (from  paying) 


CONTRA  TO  COKE'S  DICTUM  111 

agree,  then  to  the  arbitrament  of  Martin  Petit,  who  was 
designated  as  umpire — a  certain  controversy  which  had 
arisen  concerning  lands  and  tenements  to  which  each 
claimed  title.  The  proviso  of  the  deed  was  that,  if  the 
arbitrators  failed  to  agree,  or  if  the  umpire  failed  to  de- 
cide, then  the  plaintiff  was  to  have  his  action  at  law  on 
the  bond;  but  if  they  did  agree,  they  were  both  to  abide 
by  the  decision  of  the  arbitrator  or  umpire,  that  is  to 
say,  if  they  did  abide  by  the  award  the  bond  would  be 

the  sum  stated  in  the  bond,  for  even  if  he  did  not  pay  on  the 
certain  date,  he  is  held  to  pay  after.  Therefore,  &c.,  when  he  is 
bound  to  abide  to  the  arbitrament  on  a  certain  day,  even  if  they  did 
not  arbitrate  on  that  same  day,  it  is  reasonable  that  he  is  bound 
to  their  arbitrament  made  later:   For,  &c.    (sic). 

Kirton  (probably  Eoger  de  Kirketon,  Judge  of  C.  P.,  appointed 
48  Edw.  Ill)  :  It  is  true  in  your  first  case  of  payment  of  moneys 
by  the  Penal  Sum;  but  in  this  case  the  indenture  wishes  (sic — i.  e. 
provides)  that  the  paj-ty  may  go  ahead  with  his  action  in  this  court 
on  a  certain  day  after.  Therefore,  if  he  awaits  till  they  wish  to 
arbitrate,  he  would  lose  his  action,  or  the  other  party  would  lose 
his  land.     For  that  reason,  therefore,  the  cases  are  not  similar. 

Persay  (for  the  plaintiff) :  Therefore  we  tell  you  that  Martin 
Petit,  who  was  elected  umpire,  came  to  the  Chancery  on  that  very 
day  that  the  four  arbitrators  should  arbitrate  and  since  the  arbitra- 
tors could  not  agree,  he  gave  a  day  eight  days  after  at  Ripple 
(i.  e.  adjourned  the  case)  where  the  land  was,  by  your  own  assent 
(the  defendant),  on  which  day  you  came  there  and  the  said  Martin 
awarded  that  you  should  return  the  twelve  acres  of  laud  to  the 
said  J.,  upon  which  you  delivered  to  us  seven  acres  as  parcel.  And 
the  remainder  you  declined  to  deliver.  Therefore,  the  award  was 
not  performed  on  your  part.  For  which  we  ask  judgment  on  this 
bond,  which  is  (now)   in  force  and  pray  for  our  debt  and  damages. 

Hasty  (for  the  defendant)  :  But  since  the  deed  is  limited  that 
we  should  be  bound  by  their  arbitrament  on  a  certain  day,  on  which 
day,  as  we  have  said,  they  did  not  arbitrate,  nor  did  anything,  nor 
did  the  umpire  either,  therefore,  we  have  complied  with  that  which 
is  stated  in  the  indenture  (deed)  and  also  the  indenture  provides 
that  if  they  cannot  agree  that  he  (the  plaintiff)  should  go  ahead 
with  his  action  for  the  land  on  a  certain  day  after.  For  that  reason, 
as  it  is  alleged,  the  umpire  gave  us  another  day  besides  by  assent 
(adjourned  by  consent)  and  that  we  came  to  the  land  as  above. 
No  law  puts  us  to  our  answer  and  we  pray  that  it  be  barred. 

Et  sic  ad  judicium  et  super  hoc  dies  datus  est  usque  in  XV 
Paschae,  ad  audiendum  judicium  suum.  And  so  to  judgment  and 
besides  a  day  is  given  in  15  Easter  term  for  hearing  their  judgment 
(meaning  the  judges). 

[I  am  indebted  to  Mr.  F.  de  R.  Storey  and  to  Professor  Joseph 
Warren  of  the  Harvard  Law  School  for  the  foregoing  translation.] 


112  COMMERCIAL  ARBITRATION 

void.  It  appears  from  the  report  of  the  case  that  the 
original  set  of  arbitrators  was  unable  to  agree,  and  there- 
fore the  matter  went  to  the  umpire,  Petit.  Petit,  on  the 
day  fixed  in  the  deed,  was  unable  to  arrive  at  a  decision. 
In  consequence,  he  declared  an  adjournment  of  the  ar- 
bitration. Upon  this  footing,  it  is  pleaded  that,  by  reason 
of  the  failure  to  make  the  determination  upon  the  spe- 
cific day  mentioned  in  the  deed,  the  plaintiff  was  entitled 
to  enforce  the  bond.  It  was  argued,  that  smce  the  um- 
pire had  not  rendered  any  decision,  therefore  the  arbi- 
tration had  failed  and  the  plaintiff  should  be  permitted 
to  recover.  But  Hasty,  arguing  for  the  defendant,  said 
that  since  the  arbitrators  had  been  unable  to  arrive  at  a 
decision  and  had  referred  the  matter  to  the  umpire,  and 
the  umpire  had  been  unable  to  arrive  at  a  decision  and 
had  adjourned  the  arbitration,  and  that  his  client,  the 
defendant,  had  appeared  before  the  arbitrators  and  was 
ready  and  willing  to  proceed  with  the  arbitration  before 
the  umpire  on  the  adjourned  day,  it  was  no  fault  of  his 
that  the  arbitration  had  not  yet  been  determined,  and 
that,  in  consequence,  he  should  not  be  required  to  answer 
the  plaintiff's  suit.  "With  this  plea  the  Court  agreed  and 
the  plaintiff  was  non-suited.  In  other  words,  the  pendericy 
of  the  arhitration  and  the  fact  that  the  adjourned  day 
had  not  yet  arrived  was  regarded  as  a  good  plea  in  har 
to  an  action  upon  the  tond  or  upon  the  deed.  The  con- 
cluding words  of  the  decision  are:  "Et  sic  ad  judicium. 
Et  sniper  hoc,  dies  datus  est  usque  in  XV  Paschae,  ad 
audiendum  judicium  suum."  The  words  ''Et  sic  ad 
judicium"  mean  "And  so  to  judgment."  (Ames  Foun- 
dation :  * '  Year  Books  12  Richard  II, ' '  pp.  22,  23 ) .  And  the 
words  '' Et  super  hoc,  dies  datus  est  usque  in  XV  Paschae, 
ad  audiendum  judicium  suum"  undoubtedly  mean  that, 
in  addition  to  the  judgment,  a  day  certain  was  fixed  for 
hearing  and  determination  by  the  judges. 

Here,  then,  in  the  reign  of  Edward  III,  is  a  recognition 


CONTRA  TO  COKE'S  DICTUM  113 

of  the  validity  of  the  arbitration  agreement,  provided  the 
parties  reduce  the  obligation  to  the  solemn  form  then 
recognized  in  the  law  as  the  necessary  basis  for  all  obli- 
gations. The  instruments,  a  deed  and  a  bond,  were  sealed ; 
therefore  the  Court  could  give  them  effect.  Accordingly, 
the  pendency  of  the  arbitration  thereunder  was  treated  as 
a  bar  to  an  action  by  the  plaintiff,  although  the  adjourn- 
ment, as  Statham  observes,  was  not  by  deed. 

Furthermore,  Statham  and  Fitzherbert  are  authorities 
for  the  proposition:  "It  is  a  good  plea  that  they  have  put 
themselves  upon  a/n  arhitratiom  which  is  not  yet  made; 
and  this  in  Trespass"  ^®  and  cite  a  case  in  1389,  Hilary 
Term,  13  Ric.  II.  Klingelsmith  says :  ' '  There  is  no  printed 
Year  Book  for  13  Ric.  II.  Fitzh.  Arbitrement,  26,  has 
nearly  the  same  abridgment  of  the  case. ' '  ^^ 

With  Bracton's  notes  discovered  only  in  1885,  the  Eng- 
lish and  American  judges  who  have  passed  upon  this  sub- 
ject have  heretofore  relied  upon  Vynior's  Case  as  the 
final  word  upon  the  subject.  Today  we  know  that  at  least 
235  years  prior  to  Vynior's  Case  there  was  ample  legal 
authority  for  the  proposition  that  the  pendency  of  an  ar- 
bitration was  a  har  even  to  an  action  in  trespass. 

Returning  once  more  to  Vynior's  Case,  we  find,  in  ad- 
dition to  the  citation  of  Brooke  and  5  Edw,  4.,  reference 
to  21  H.6.30a,  28,  29  H.6  6b,  49  E.3.9  a,  18  E.4.9,  8  Ed. 
4.10.    We  shall  examine  each  of  these  in  turn. 

Examination  of  the  Year  Book  report  in  21  H.  VI.  30a, 
will  not  disclose  whether  there  was  any  bond  accompany- 
ing the  submission,  nor  whether  the  submission  was  in 
writing.  We  find  there  only  a  plea  to  an  action  in  debt 
that  the  parties  had  agreed  to  arbitrate.  The  action  is 
an  action  upon  an  award,  and  the  defendant  pleads  that 
the  authority  of  the  arbitrator  had  been  revoked.  He 
subsequently  withdraws  his  plea  and  interposes  the  plea 

"Statham,  Klingelsmith 's  translation,  p.  123. 
''Ibid. 


114.  COxMMERCIAL  ARBITRATION 

that  he  is  not  indebted.  The  case  does  not  disclose  its 
outcome.  All  that  we  find  at  the  end  is:  "And  he 
made  his  law."  The  citation  in  Vynior's  Case  must  be 
based  upon  Brooke's  digest  of  the  case,  for  Brooke  says 
that  in  an  action  of  debt,  where  arbitrament  is  pleaded, 
it  is  a  good  plea  that,  after  the  submission  and  before 
an  award  was  rendered,  the  plaintiff  discharged  the  ar- 
bitrator on  such  a  day,  year  and  place,  etc.,  for  that  can 
be  countermanded.  But  the  case  itself,  as  it  is  reported 
in  the  Year  Book,  does  not  support  Brooke's  abridgment. 
Fitzherbert  does  not  refer  to  the  case  at  all. 

As  bearing  upon  the  looseness  of  reports  in  the  Year 
Books,  Kyd  ^^  states  that  ' '  a  case  is  reported  in  two  books, 
in  one  of  which  a  doubt  is  expressed,  whether  all  being 
by  parol,  the  plaintiff  could  maintain  that  action  (on  an 
award)  or  have  any  other  remedy;  but  that,"  says  Kyd, 
"is  evidently  nothing  more  than  a  loose  note  of  the  re- 
porter, and  the  pleadings  are  there  very  inaccurately 
stated.  In  the  other  book,  the  case  is  reported  at  length, 
and  the  manner  of  the  pleadings  distinctly  given ;  the 
breach  being  assigned  in  a  discharge  by  the  defendant  of 
the  arbitrators  from  making  any  award ;  and  the  judgment 
of  the  court,  without  much  hesitation,  in  favor  of  the 
plaintiff."^'- 

There  remain  to  consider  but  two  more  references  in 
Vynior's  Case— IS  E.  4,  9  and  8  Ed.  4,  10.  Upon  ex- 
amination of  18  Edw.  IV,  9  (1479),  we  discover  that  the 
action  was  an  action  on  covenant  brought  upon  an  in- 
denture, by  which  the  defendant  agreed  to  pay  the  plain- 
tiff £10  upon  condition  that  the  plaintiff  build  a  house 
for  the  defendant.  "And  the  plaintiff  shows  how  he  came 
to  make  the  house  and  was  ready  to  do  it  when  the  de- 
fendant came  to  him  and  commanded  tliat  he  should  not 


""Law  of  Awards,"  p.  32. 

'^Newaate  v.  Degelder,  18  Car.  II,  1  Sid.  281,  2  Keble's  Reports, 
10,  20,  24. 


CONTRA  TO  COKE'S  DICTUIVI  115 

build  the  house,  on  the  strength  of  which  he  departed." 
Upon  demurrer,  both  Littleton  and  Choke  held  that  the 
plea  was  a  good  plea,  for,  as  Littleton  says:  "If  one  is 
retained  by  me  by  a  deed  to  be  my  servant  for  a  year 
and  then  I  command  him  that  he  must  not  come  to  my 
house,  etc.,  and  he  comes  thereafter  to  my  house,  I  have 
an  action  of  trespass  against  him.  Therefore  here,  if  the 
carpenter  comes  upon  my  land,  after  my  command  that 
he  should  not,  I  may  have  an  action  of  trespass  against 
him.  Erga,  by  preventing  the  carpenter  from  building 
the  house,  the  latter  was  discharged  from  his  covenant 
and  after  such  a  discharge  the  carpenter  has  his  action 
in  debt  for  the  ten  pounds,  if  he  wishes,  for  there  is  no 
defense."  It  is  only  by  way  of  argument,  at  the  close 
of  the  case,  that  Vavisour  says  that  "A  man  can  dis- 
charge his  arbitrator  or  his  auditor  after  the  submission 
and  after  they  have  sat" — an  argument  which  had  no 
bearing  upon  the  case  and  which  in  no  wise  expresses  or 
affects  the  determination  of  the  judges.  The  case  may 
be  regarded  as  authority  for  the  main  principle  decided 
in  Vynior's  Case,  namely,  that  the  defendant  having  made 
it  impossible  to  perform  the  condition  of  the  bond,  the 
plaintiff  could  sue  upon  the  bond;  but  it  is  in  no  respect 
an  authority  for  the  right  of  either  party  to  revoke  an 
agreement  to  arbitrate. 

The  last  case  cited  in  Vynior's  Case  is  8  Edw.  IV,  9 
and  10  (1468).  This  was  an  action  upon  an  award  made 
by  arbitrators,  and  the  entire  discussion,  covering  four 
pages  of  the  Year  Book,  relates  to  the  question  whether 
it  is  essential  to  the  holding  of  the  defendant  upon  an 
award,  that  he  shall  have  had  actual  notice  of  the  award 
by  the  arbitrator.  The  judges  gravely  discuss  whether  or 
not  the  plaintiff  should  have  his  suit;  though  it  appeared 
from  the  pleadings  that  he  had  not  alleged,  that,  before 
the  suit,  the  defendant  had  notice  of  the  award.  They 
ultimately  hold  that  it  was  the  business  of  the  defendant 


116  COMMERCIAL  ARBITRATION 

to  know  of  the  award,  and  that  it  was  not  necessary  to 
allege  and  prove  actual  notice  of  the  award  to  the  de- 
fendant before  the  suit  was  brought.-^ 

This  case  is,  in  realitj^  an  authority  for  the  validity 
and  sanctity  of  arbitrations,  because  it  appears  from  the 
long  discussions  and  debates  by  the  judges  who  were 
participating  (they  included  Yelverton,  Billing,  Markham 
and  Laken)  that  they  regarded  the  decision  as  of  im- 
portance on  account  of  its  ultimate  effect  upon  the  "Com- 
mon "Weale. ' '  Laken  says  that  ' '  Every  arbitrament  is  for 
the  purpose  of  settling  (appease)  the  controversies  and 
differences  (disputes  and  variances)  which  are  between 
the  parties";  and  for  this  reason  he  holds  that  when 
the  parties  "submit  themselves  to  arbitration  they  have 
notice  of  the  difference  which  exists  between  them  and 
have  elected  one  person  to  he  their  judge,  etc.  "^'  Ac- 
cordingly, he  says,  "It  behooves  them  to  attend  before 
him  to  know  his  determination,  and  they  are  charged 
at  their  peril  to  take  notice  of  the  arbitrament  so  as  to 
perform  it."  And  he  uses  as  an  illustration  in  his  ar- 
gument the  duty  of  a  defendant  who  has  given  a  recog- 
nizance to  appear  on  a  certain  day  before  the  court.  "If 
perchance  the  banc  is  another  place,  it  behooves  him  to 
be  there  at  his  peril."  It  will  not  be  a  plea  for  him  to 
say  that  he  did  not  know  of  the  change.  Accordingly, 
says  Laken:  "If  a  man  is  bound  by  the  arbitrament  of 
one  and  that  one  awards  something  ...  it  behooves  me 
to  perform  the  arbitrament,  to  take  notice  at  my  peril." 
Yelverton,  who  takes  a  contrary  view,  nevertheless  em- 
phasizes the  importance  to  the  "Common-Weale"  of  the 
precedent  about  to  be  made.     In  a  previous  case,  8  E. 

"  See  also  March,  p.  261.  ' '  And  uhen  the  arbitrators  have  made 
their  award  according  to  the  submission,  though  they  are  not  bound 
to  give  notice,  but  the  parties  are  to  take  notice  thereof  at  their 
own  peril,  to  save  the  forfeiture  of  their  Bonds,  etc." 

"Italics  ours. 


CONTRA  TO  COKE'S  DICTUM  117 

IV  12  b.,**  Yelverton  had  said:  "An  Arbitrement  ...  is 
used  for  the  Common-weale,  for  to  decide  debates  and 
wrongs  amongst  the  people,  as  fines  are"  and  March  ex- 
plains '^^  that  "A  fine  is  so  called,  because  that  it  doth  finem 
Utibus  imponere"  and  accordingly  "The  proper  work  or 
office  of  an  arbitrement  is  to  put  an  end  to  controversy." 
"For,"  says  Yelverton  in  this  case,  "arbitrament  is  used 
for  the  Common-Weale,  that  is  to  say,  to  settle  disputes 
and  grievances  between  people  and  therefore,  like  fines, 
and  if  the  arbitrators  can  charge  a  party  without  giving 
him  a  notice,  then  the  people  will  hesitate  (fear  and  doubt) 
to  submit  themselves  to  arbitration."  And,  accordingly, 
finding  no  precedent  to  the  contrary  and  doing,  as  he  says, 
' '  The  savants  and  the  civilians  do  when  a  new  case  on  which 
they  have  no  law  to  go  upon  comes  before  them ;  they  resort 
to  the  law  of  nature,  which  is  the  basis  of  all  law  and  what 
they  deem  as  being  most  beneficial  to  the  Common-Weale ' ' 
— he  comes  to  the  conclusion  that  the  award  should  not  be 
binding  without  notice  to  the  party  against  whom  the 
award  is  made.^®  It  is  difficult  to  understand  how  anyone 
can  conclude  that  in  these  times  the  courts  were  opposed  to 
arbitration  as  a  method  of  settling  disputes.  Indeed,  as 
March  says :  27  <  <  the  Law  seems  more  favorable  to  Arbitre- 
ments,  then  other  Judgments,  insomuch  as  by  Arbitrators 
the  strict  course  and  tedious  ceremonies  of  Law  Suits  which 
are  wont  most  commonly  to  weary  Suiters  (and  to  dive 
somewhat  too  deep  into  their  Purses)  are  cut  off,  and 
shorter  decisions  by  them  made,  with  little  or  no  cost  at 
all. ' '  Nor  is  there  any  fear  in  the  minds  of  the  judges  that 
their  courts  are  being  "ousted  of  jurisdiction."  On  the 
contrary  they  encourage,  in  the  interests  of  the  *  *  Common- 
Weale,"  the  final  settlement  and  disposition  of  contro- 

»*  March,  p.  219. 

»  Ibid. 

"Brooke,  p.  .37. 

"March:   "Slander  and  Arbitraments,"  p.  262, 


118  COMIVIERCIAL  ARBITRATION 

versies  outside  of  the  courts.  However,  in  those  days  prece- 
dents were  easily  lost  or  misunderstood.  March  and  Brooke 
make  no  clear  distinction  between  obiter  dicta  and  decision. 

It  will  be  impossible  to  do  justice  either  to  the  writers 
of  the  days  of  March  and  Brooke  unless  we  understand 
something  of  their  difficulties.  Only  within  the  past  two 
decades  has  there  been  any  scientific  study  of  the  sources 
of  the  Year  Books  themselves.^^  Not  until  Mr.  Horwood 
and  Mr.  Pike  had  done  their  work  in  the  Rolls  Series 
upon  the  unpublished  Year  Books  had  the  original  man- 
uscript of  the  Year  Books  received  any  study  at  all. 
Up  to  that  time  the  entire  legal  profession,  indeed,  the 
legal  historians  themselves,  accepted  as  authoritative  the 
printed  Year  Books  or  the  abridgments  published  in  the 
sixteenth   century. 

Describing  a  large  MS.  in  the  Cambridge  University 
library,  from  which  he  took  the  text  of  the  Year  Book 
20  and  21  Edward  I,  Horwood  "tells  us  that,  besides 
the  reports  of  those  years,  'there  is  a  large  body  of  cases 
illustrative  of  pleadings  in  various  writs,  and  nearly  forty 
consecutive  folios  (370-409)  of  cases  which,  from  the  names 
of  the  judges,  must  have  occurred  in  or  before  18  Edward 
I'  (1290). 2^  Fitzherbert  also  used  for  his  Abridgements 
not  only  Bracton's  Note  Book,  but  also  reports  which 
came  from  12  &  13  Edward  I  (1284-5),  as  well  as  a  num- 
ber of  undated  cases  of  the  time  of  Edward  I."^°  For 
a  long  time  it  was  believed  that  the  Year  Books  from  Ed- 
ward Ill's  reign  down  to  Henry  VII 's  reign  were  ac- 
tually arranged  by  official  reporters  paid  by  the  Crown 
itself.  This  belief  was  shared  by  Coke,  Bacon  and  Black- 
stone.    Now,  however,  such  students  as  Sir  Frederick  Pol- 

"  See  Holdsworth :  ' '  The  Year  Books, ' '  Vol.  II,  ' '  Essays  in  Anglo- 
American  Legal  History,"  p.  96  et  seq. 

»Y.  B.  20,  21   Ed.  l'(R.  S.),  xv. 

»•  Y.  B.  2,  3  Ed.  II  (S.  S.)  ix,  x.  Holdsworth:  "The  Year  Books," 
Vol.  II,  "Essays  in  Anglo -American  Legal  History,"  p.  98. 


CONTRA  TO  COKE'S  DICTUM  119 

lock  find  this  to  be  without  foundation.^^  We  learn  that 
these  Year  Books  owe  their  origin  mainly  to  the  enter- 
prise of  private  members  of  the  legal  profession,^^  and 
there  is  substantial  evidence  for  believing,  as  Professor 
Maitland  believes,  that  these  are^^  "students'  notebooks." 
"We  see  a  most  remarkable  contempt  for  the  non-scien- 
tific detail  of  litigation :  especially  for  proper  names.  These 
veiy  often  are  so  violently  perverted  that  we  seem  to  have 
before  us  much  rather  the  work  of  a  man  who  jotted  down 
mere  initials  in  court,  and  afterwards  tried  to  expand 
them,  than  the  work  of  an  official  who  had  the  faithful 
plea  rolls  under  his  eye.  "^*  And  again,  the  fact  that 
there  are  divergent  reports  of  the  same  case  indicates 
that  the  authors  "were  men  writing  for  themselves,  who 
not  only  simplified  facts,  but  also  expanded  arguments, 
and  even  invented  both  facts  and  arguments. ' '  ^^  Again, 
as  Professor  Maitland  tells  us:  "The  spirit  of  the  earli- 
est Year  Books  will  hardly  be  caught  unless  we  perceive 
that  instruction  for  pleaders  rather  than  the  authorita- 
tive fixation  of  points  of  substantive  law  was  the  primary 
object   of  the   reporters."^® 

In  the  fourteenth  and  fifteenth  centuries,  Maitland 
says:  ^^  "Year  by  year,  term  by  term,  lawyers  were  report- 
ing cases  in  order  that  they  and  their  fellows  might  know 
how  cases  had  been  decided.  The  allegation  of  specific  pre- 
cedents was  indeed  much  rarer  than  it  afterwards  hecame, 
and  no  calculus  of  authority  so  definite  as  that  which  now 
obtains  had  heen  established  in  Coke's  day,  far  less  in  Lit- 

" Holdsworth :  "The  Year  Books,"  Vol,  11,  '< Essays  in  Anglo- 
American  Legal  History,"  pp.  104,  105. 

"''Ibid.,  p.  106. 

»Y.  B.  3  Ed.  II  (S.  S.),  xii. 

^Y.  B.  1,  2  Ed.  II  (S.  S.),  xiii. 

■^  Holdsworth :  "The  Year  Books,"  Vol.  II,  "Select  Essays  in 
Anglo-American  Legal  History,"  p.  107.  See  also  reference  in  foot- 
note 2. 

'•Y.  B.  1,  2  Ed.  II  (S.  S.),  xiv. 

"Encyclopaedia  Britanniea,  11th  Ed.,  Vol.  9,  p.  603,  Art.  "Eng- 
lish Law,"  by  F.  W.  M.  [i.  e.  Frederick  W.  Maitland.] 


120  COMMERCIAL  ARBITRATION 

tleton's}^  Still  it  was  by  a  perusal  of  reported  cases 
that  a  man  would  learn  the  law  of  England."  So  in 
the  introduction  to  Brownlow  and  Goldesborough 's  Re- 
ports (3rd  Ed.  1675),  the  publisher  explains  to  the  reader 
that  he  thinks  it  "would  prove  too  obvious  a  neglect  of 
Common  good"  to  keep  these  cases  ''in  the  dark"  and 
therefore  he  presents  them  "to  the  World,"  and  that  as 
"some  few  only  have  hitherto  enjoyed  by  private  Copies" 
he  hopes  now  ' '  that  all  men  may  take  that  benefit  by  them 
now  being  in  Print."  (Brownlow  and  Goldesborough  were 
"most  Judicious  Prothonotaries"  of  the  Court  of  Com- 
mon Pleas.)  These  reports  of  Brownlow  and  Goldesbor- 
ough, as  we  have  seen,  contain  Vynior's  Case  reported  in 
two  places,  placing  an  emphasis  different  from  Coke 's  upon 
the  phases  of  the  case  in  which  we  are  here  interested. 

Although  the  records  of  decisions  were  valuable  things, 
the  practicing  lawyer  could  get  access  to  but  a  few  of 
them  and  then  only  by  a  lucky  chance.  Neither  the  ap- 
prentice nor  the  sergeant  could  be  certain  of  securing 
anything  like  the  access  to  precedents  that  we  find  neces- 
sary either  for  purposes  of  instruction  or  the  prepara- 
tion of  briefs.^^  There  were  three  abridgers  of  the  Year 
Books — Statham,  Fitzherbert  and  Brooke.  Statham  was  a 
reader  of  Lincoln's  Inn  in  the  Lent  term  of  1471."  His 
abridgment  was  printed  somewhere  about  the  year  1495, 
later  editions  being  published  in  1585  and  1679.*^  Fitz- 
herbert's  was  the  more  complete  work,  first  printed  in 
1514  under  the  title  "Le  Graunde  Abridgment""  and 
his  work  contains  extracts  from  many  still  unprinted 
Year  Books,  as  well  as  from  Braeton  's  Notebook.*^    Brooke, 

*'  Italics  ours. 

»» Holdsworth :    "The   Year   Books,"  Vol.  II,   "Select  Essays  in 
Anglo-American  Legal  History,"  pp.  108,  109. 
*''Ibid.,  p.  112. 
*Ubid.,  pp.  112,  113. 
''Ibid.,  p.  113. 
**Ibid. 


CONTRA  TO  COKE'S  DICTUM  121 

upon  whom  Coke  relies  in  his  citations  in  Vynior's  Case, 
based  his  work  largely  on  Fitzherbert 's.  Even  the  printed 
reports  of  Richard  Tottell  of  the  Year  Books  are  not  de- 
pendable, for  Tottell  himself  has  attempted  to  make  *  *  cor- 
rections"*^ and  the  carelessness  with  which  these  cor- 
rections have  been  printed  has  been  only  recently  demon- 
strated by  Professor  Maitland/^  "Of  mere,  sheer  non- 
sense those  old  black  letter  books  are  but  too  full."*® 

So  much  for  an  understanding  of  the  sources  of  error 
in  the  Year  Books.  Equally  instructive  is  modern  re- 
search into  the  origin  and  sources  of  the  English  reports.*''' 
It  is  indeed  startling  to  the  modern  lawyer  to  learn 
that,  from  the  last  Year  Book  in  1537  to  the  year  1865, 
there  were  no  official  reports  and  that  for  more  than 
three  centuries  the  work  of  keeping  records  of  the  de- 
cisions of  the  judges  was  wholly  dependent  upon  private 
enterprise.  Says  Veeder:  "The  most  superficial  ex- 
amination of  the  contents  of  these  volumes  reveals  the 
defects  which  justify"  the  arraignment  made,  among  oth- 
ers, by  Chief  Justice  Holt.  *  *  They  will  make  us  to  appear 
to  posterity  for  a  parcel  of  blockheads. '  '*^  The  manner  of 
making  these  reports  is  interesting.  "A  lawyer,"  says 
Veeder,  "would  preserve  in  his  common-place  book  notes 
of  the  cases  cited  by  him  in  an  argument,  and  this  would 
be  followed  by  a  memorandum  of  the  case  in  which  they 
were  used.  Pie  would  also  add,  from  time  to  time,  other 
cases  which  he  happened  to  hear,  or  notes  of  which  were 
shown  to  him  by  his  professional  brethren.  If  he  sub- 
sequently attained  a  judicial  station  he  would  of  course 
take  notes  of  the  cases  argued  before  him,  and,  very 
likely,  of  cases  cited  in  argument  with  which  he  was  not 

**IUd.,  p.  102. 

«Y.  B.  1,  2  Ed.  II   (S.  S.),  xxi. 

« Veeder:    "The   English   Eeports,    1537-1865,"   Vol.   II,   "Select 
Essays  in  Anglo-American  Legal  History,"  p.  123  et  seq. 
"Ibid.,  p.  125. 
"  Slater  v.  May,  2  Ld.  Eaymond  1072. 


122  COMMERCIAL  ARBITRATION 

already  familiar.  Siicli  notes  were  prepared  for  personal 
use  and  without  any  thought  of  publication.  Their  sub- 
sequent publication  was  almost  always  posthumous,"*' 
Yet  "The  note-book  of  a  reputable  judge,  containing  a 
report  of  litigation  over  which  he  presided,  would  possess 
all  the  elements  of  authenticity."^"  We  thus  understand, 
for  example,  the  unreliability  of  citations  such  as  are 
used  by  March  for  his  statement  that  a  submission  to  ar- 
bitration is  always  revocable.  Take,  for  example,  his  cita- 
tion of  the  case  in  28  H.  VI,  6.  He  cites  it  as  authority 
for  the  proposition  that,  if  two  plaintiffs  and  one  de- 
fendant, or  two  defendants  and  one  plaintiff,  submit  to 
arbitration,  neither  the  one  plaintiff  without  the  other, 
nor  the  one  defendant  without  the  other,  may  discharge 
the  arbitrator.  His  reason  is  "because  that  they  were 
chosen  by  the  joynt  authority  of  both  and  therefore  can- 
not be  countermanded  by  one  alone.  "^^  But  reference 
to  the  case  itself  shows  that  it  is  a  stronger  authority  for 
the  revocability  of  the  submission  than  Vynior's  Case.  The 
facts  disclosed  in  the  Year  Book  are  that  one  B.  sued  C. 
for  trespass.  C.  set  up  an  agreement  to  arbitrate — whether 
it  was  by  bond  or  deed  or  parol  agreement  does  not  ap- 
pear from  the  case.  B.,  the  plaintiff,  sets  up  that  he  re- 
voked the  appointment  of  J.  B.,  the  arbitrator,  and  the 
Court  decides  for  the  plaintiff.  In  arguing  against  the 
Court,  Pole,  for  the  defendant,  says :  * '  You  should  not  go 
to  judgment,  for  this  discharge  is  void,  for  one  party  alone 
cannot  discharge  without  the  other,  for  he  was  not  elect- 
ed by  one  alone,  but  by  the  two  jointly  and  therefore  it 
is  for  them  both  to  discharge.  If  I  and  two  others  sub- 
mit ourselves  to  the  arbitration  of  one  man  indifferently 
chosen  for  a  trespass  committed  by  those  two  upon  me, 

«Veeder:    "The  English  Eeports,   1537-1865,"  Vol.   II,  "Select 
Essays  in  Anglo-American  Legal  History,"  p.  125. 
°*7bid.,  p.  126. 
"I'p.   lGl-5. 


CONTRA  TO  COKE'S  DICTUM  123 

in  that  case  none  of  them  can  discharge,  and  if  he  does 
discharge  it  is  void.  Therefore  here,  etc.  To  which  Ash- 
ton,  Justice,  replies:  It  seems  to  me  to  be  the  contrary, 
for  when  one  man  is  elected  by  two  as  arbitrator  for  both, 
he  is  elected  or  appointed  by  one  and  also  by  the  other. 
It  is  in  effect  as  if  one  has  appointed  one  and  the  other 
another,  in  which  case  each  can  discharge  the  one  he  has 
appointed,  but  in  the  case  where  there  is  one  plaintiff  and 
two  defendants  who  have  submitted  themselves  to  arbi- 
tration and  one  is  indifferently  elected  by  those  three,  in 
that  case  one  defendant  cannot  discharge  him,  but  the 
both  defendants  can  discharge  him;  and  therefore  here, 
as  if  two  men  appoint  one  man  their  agent,  one  cannot 
discharge  him,  but  both  can  without  assent  of  the  third." 
Accordingly,  the  justice,  having  demolished  Pole's  argu- 
ment, gave  judgment  for  the  plaintiff. 

The  inaccuracy  of  the  reasoning  on  the  part  of  the 
Court  is  very  apparent  to  modern  eyes,  for  if  two,  against 
whom  a  claim  of  trespass  is  made,  cannot  release  each  other 
from  the  arbitration  because  of  the  mutuality  of  their 
agreement,  it  would  seem  to  be  equally  true,  as  Pole  ar- 
gued, that  neither  of  any  two  parties  who  bind  them- 
selves to  arbitration  can  revoke  the  agreement  without  the 
consent  of  the  other.  Pole  understood  the  principle  of 
mutual  and  reciprocal  obligations  in  a  contract.^^ 

Ashton  reasoned  that  the  arbitrator  had  received  power 
from  two  principals,  and  that  the  legal  effect  was  the  same 
as  if  each  had  named  separate  and  distinct  attorneys. 
Therefore,  each  could  revoke.  But  this  is  a  false  analogy. 
For  if  two  principals  on  the  same  side  of  a  controversy 
appoint  an  agent  to  act  for  both,  neither  principal  may 
revoke  without  the  assent  of  the  other.  The  fact  that  the 
principals  are  on  opposing  sides  of  a  controversy  cannot 

"Two  years  later,  30  Henry  VI  (1452)  Pole  Mmself  became  a 
Judge  of  King's  Bench.  See  Foes:  "Judges  of  England,"  Vol. 
IV,  p.  353. 


IM  COMMERCIAL  ARBITRATION 

alter  the  joint  eharacter  of  the  appointment.  Hence  neither 
party  can  revoke  without  the  other's  assent.  Yet,  if  the 
principals  were  on  the  same  side  of  the  controversy  and  a 
third  man  were  introduced  upon  the  other  side,  neither 
principal  could  revoke  without  the  assent  of  the  other! 
One  can  see  how  immersed  in  false  analogy  Ashton  was, 
for  even  upon  the  theory  of  agency,  there  is  no  distinc- 
tion between  a  submission  by  two  parties  to  a  controversy 
and  a  submission  by  two  people  on  the  same  side  of  the 
controversy.  The  fallacy  lies  in  treating  the  arbitration, 
as  March  does,  as  a  joint  agency.  Of  course,  if  it  were 
a  joint  agency,  it  could  be  revoked  only  by  the  united 
action  of  the  two  principals;  but  again,  if  naming  an 
arbitrator  creates  an  agency,  then,  where  two  people  ap- 
point the  same  agent,  why  have  they  not  acted  as  jomt 
principals  and  rendered  the  power  irrevocable  save  by 
the  consent  of  both? 

It  has  been  said  recently :  ^^  "  The  existence  of  an 
erroneous  doctrine  in  the  law  means  that  some  lawyer  has 
been  inadequate  to  his  duty.  Such  a  doctrine  cannot 
come  into  being  except  through  a  misunderstanding  of 
principles  and  an  acceptance  of  insufficient  reasons.  At 
some  point  in  our  legal  history,  therefore,  attorneys  have 
not  been  competent  to  protect  their  clients,  or  judges 
have  rendered  judgment  upon  insufficient  knowledge.  "We, 
who  inherit  a  detailed  body  of  jurisprudence,  are  not  ade- 
quate to  our  duty,  either  as  practicing  attorneys  or  as 
members  of  the  judiciary,  if  we  fail  to  correct  these  er- 
rors. As  attorneys  we  are  not  resourceful  in  protecting 
our  clients'  rights,  and  as  judges  we  are  not  diligent  in 
studying  the  principles  which  we  assume  to  enforce." 

When  Pole  argued  in  1450,  as  we  have  seen,  there  was 
no  published  edition  of  Bracton's  notes.  We  can  hardly 
blame  him,  therefore,  for  not  referring  to  the  early  au- 
thorities.   Nor  had  he  access  to  49  Edw.  Ill  {Erode  v.  de 

"AJ)bot,  Everett  V.:  "Justice  and  the  Modern  Law,"  1913,  p.  79. 


CONTRA  TO  COKE'S  DICTUIVI  125 

Ripple — 1375).  Even  in  these  days  two  judges  at  Special 
Term  may  render  opposite  decisions  in  cases  involving  the 
same  questions  of  fact  and  law,  neither  judge  knowing 
his  colleague's  opinion.^*  And  frequently,  for  want  of 
citation  of  an  authority,  the  Court  may  fall  into  error.  We 
should  not  be  too  rigorous,  therefore,  in  our  criticism  of  the 
bench  and  bar  of  the  fifteenth  century,  considering  the  lim- 
ited number  of  books  available  and  the  limited  education 
of  the  lawyers,  for  relying  upon  reasoning,  unsupported 
by  precedent,  or  for  falling  victim  to  inaccurate  citation 
of  authorities.^^ 

Coke's  reports  contain  no  cases  decided  earlier  than 
the  reigns  of  Elizabeth  and  James  I,  and  we  find  in  the 
compendious  index  at  the  end  of  the  Thomas  and  Eraser 
edition  (1826)  not  a  single  reference  for  the  statements 
concerning  "Revocation  and  Submission,"  except  Vynior's 
Case,  though  ''Arbitration  and  Award"  cover  over  a  page 
and  a  half  of  notes.  The  high  regard  and  respect  for 
Coke's  learning  and  general  accuracy  which  the  Bar  of 
his  times  universally  accorded  him,  doubtless  gave  to  the 
obiter  in  Vynior's  Case  a  standing  which,  as  a  matter 
of  accurate  legal  reasoning,  it  did  not  deserve,  and  which, 
as  we  discover  upon  the  basis  of  earlier  precedents,  it 
should  not  have  been  accorded.  Yet  it  is  doubtful  wheth- 
er, before  the  publication  of  Klingelsmith 's  English  trans- 
lation of  Statham  (1915)  and  the  publication  of  Bracton's 
"Notes"  (1887)  any  English  lawyer  would  have  had  the 
temerity  to  go  back  to  Edward  III,  re-examine  the  cita- 

"  See  New  YorTc  Law  Journal,  June  11,  1917.  Decisions  by  Judges 
Greenbaum  and  Bijur,  upon  substantially  the  same  kind  of  ease, 
each  reaching  a  conclusion  directly  opposite  to  the  other's.  Uni- 
versal Film  Manufacturing  Co.  v.  Bell,  100  Misc.  281,  167  N.  Y. 
Supp.  124;  Message  Photoplay  Co.  v.  Bell,  100  Misc.  267,  167  N.  Y. 
Supp.  129. 

'"  We  know  that  Bracton  's  Note  Book  was  not  available  for  him,  and 
there  is  considerable  doubt  as  to  whether  the  Year  Book  containing 
the  decision  of  49  Edw.  Ill  had  yet  been  printed.  See  Soule: 
"Year  Book  Bibliography,"  Harvard  Law  Eeview,  VoL  XIV,  No.  8, 
pp.   557-587. 


126  COMMERCIAL  ARBITRATION 

tions  in  Vynior's  Case,  especially  Erode  v.  de  Ripple,  and 
distinguish  between  an  obiter  dictum  and  a  decision  by 
my  Lord  Coke.  Nevertheless,  the  references  in  Vynior's 
Case  to  the  five  or  six  meager  earlier  authorities  are  a 
compendious  caution  to  later  lawyers,  warning  them  to 
examine  the  earlier  cases  for  a  proper  evaluation  of  the 
dicta.  In  Vynior's  Case,  Brooke 's  ' '  Abridgment ' '  is  the  pri- 
mary authority,  and  he,  as  we  now  see,  was  in  error.  Yet 
March  accepts  this  dictum  and  the  reference  to  Brooke, 
and  cites  both  as  authorities  for  the  doctrine  of  the  revo- 
cability  of  a  submission;  and  so,  thanks  to  Coke  and 
March,  Vynior's  Case  becomes  the  respected  and  control- 
ling authority  for  a  proposition  which  was  not  involved 
in  the  case.  Thus,  in  1806,  before  Chief  Justice  Ellen- 
borough  in  Milne  v.  Gratrix,  Vynior's  Case  is  the  only 
case  upon  this  point  discussed  by  the  lawyers  and  they 
go  so  far  as  to  concede,  upon  the  basis  of  its  authority, 
that  "At  common  law  the  bond  (of  arbitration)  was 
revocable"  (a  proposition  for  which  Vynior  is  no  au- 
thority at  all,  for  it  will  be  recalled  that  the  plaintiff  was 
permitted  to  recover  upon  the  bond)  ;  and  Lord  Ellen- 
borough  goes  even  farther  and  holds  not  only  that  the 
rule  as  stated  was  the  rule  at  Common  Law,  but  that  even 
under  the  statute  of  William  (9  and  10  W.  3.  c.  15— by 
which  a  submission  was  made  a  rule  of  court)  "There  is 
nothing  ...  to  make  it  irrevocable  while  it  continues 
executory."  Thus  is  created  Milne  v.  Gratrix — another 
leading  case. 

The  judges  were  conscious  of  the  unsoundness  of  the 
rule,  but  they  applied  it,  because  it  had  become  hoary  with 
antiquity.  In  Aston  v.  George,^^  Abbot,  C.  J.,  observes 
that  "there  is  a  material  distinction  between  a  reference 
under  a  Judge's  order  and  a  reference  by  deed,"  and 
that  "when  the  submission  is  revoked,  there  remains  noth- 
ing which  can  be  made  a  rule  of  Court"  while  "a  Judge's 

••2  Barnewall  and  Alderson  395. 


CONTRA  TO  COKE'S  DICTUM  127 

order,  on  the  other  hand,  may  be  made  a  rule  of  court 
without  reference  to  any  statute."  Park,  J.,  says  in 
ClapJiam  v.  Highmii:^''  "If  there  were  any  ground  for 
assisting  the  Plaintiff,  the  Court  would  be  disposed  to 
do  so  here."  Nevertheless  the  Court  declines  to  set  aside 
the  revocation  of  a  submission  made  wider  a  judge's  or- 
der for  no  other  reason  than,  as  Burroughs  says:  ''For 
thirty  years  it  has  always  been  considered  in  Westminster- 
hall  that  a  submission  may  be  revoked  at  any  time  before 
the  award  is  made. ' '  We  may  say  with  Coke  himself :  ^^ 
"Plere  out  (for  want  of  a  true  and  certain  report)  have 
sprung  many  absurd  and  strange  opinions,  which  being 
carried  about  in  a  common  charm,  and  fathered  on  grave 
and  reverend  judges,  many  times  with  the  multitude,  and 
sometimes  with  the  learned,  receive  such  allowance,  as 
either  beguile  or  bedazzle  their  conceits  and  judgments." 
Can  anyone  now  believe  that,  if  the  early  cases  in  Brac- 
ton  and  those  cited  in  Statham  had  been  as  accessible  to 
the  Bar  and  to  the  Bench  of  those  times  as  our  early 
New  York  decisions  are  to  us,  this  error  in  legal  rea- 
soning would  have  so  long  thrived  and  bred  its  fertile 
and  hardy  brood  of  dwarfs?  Surely  the  "common  charm" 
of  Vynior's  Case  is  due  to  its  having  been  "fathered" 
on  a  "grave  and  reverend"  judge,  thus  "beguiling  and 
bedazzling"  even  "the  learned." 

"  1  Bingham  87,  at  p.  90. 
"Introduction  to  Part  I,  p.  xxvii. 


CHAPTER  X 

THE  EFFECT  OF  COKE'S  DICTUM 

The  first  compendious  abridgments  of  English  Common 
Law,  comparable  in  any  way  with  our  modern  digests,  are 
Rolle's  reports  in  French,  published  in  1668,  and  Viner's 
reports  in  English,  published  in  1747.  Yet  one  searches 
in  vain  under  the  title  "Arbitrament"  through  either  of 
them  for  any  reference  to  Vynior's  Case,  or  for  the  doc- 
trine of  the  revocability  of  the  submission.  Under  the 
title  of  "Authoritie"  in  Rolle,  we  find  the  following:^ 

"D,  Who  can  Revoke. 

"1.  If  2  submit  themselves  to  the  award  of  I.  S.,  one 
alone  can  revoke  the  submission,  28  H.  6,6,b  adjudged,  21 
H.  6.  30,  Brooke  on  Abridgment,  5  E,  4,  where  he  is  bound 
by  bond  to  the  award,  but  he  will  forfeit  his  bond  by  re- 
voking, 8  E.  4,  10,  b.  21  H.  6.  30.  Co.  8.  Vinior  82.  Contra 
5  E.  4,  3,  where  bound  by  bond. 

"E.  Who  can  revoke  at  law. 

"2.  If  2  on  one  side  and  one  on  the  other  submit  them- 
selves to  the  award  of  I,  S.,  one  of  the  said  two  can  revoke 
the  submission  without  the  other.    Contra  28  II.  6.  6.b." 

Yet,  as  we  have  seen,  careful  examination  of  28  H.  6.  6  b. 
discloses  that  the  ease  holds  quite  the  reverse. - 

"3.  If  A  and  B  submit  themselves  to  the  award  of  I.  S, 
and  then  before  any  award  is  rendered,  revoke  the  au- 
thority of  the  arbitrator,  that  is  no  revocation  at  law  un- 

»l?ollo's  "  Ahrldgmont, "   Vol,   T,   p.    3.31. 
'Jvte,  pp.   122-124. 

128 


EFFECT  OF  COKE'S  DICTUM  129 

less  notice  of  this  revocation  is  given  the  arbitrator.  Co.  8. 
Vinior  82.  per  Curiam  8  E.  4.10.b.21.b." 

Viner,  under  ''Authority — What  shall  be  said  a  good, 
and  what  a  bad,  or  void  Authority, ' '  says  this :  * 

"4.  A  man  cannot  make  an  authority,  power  or  war- 
rant irrevocable,  which  by  law,  and  in  its  own  nature, 
is  revocable.  8  Rep.  82.  a.  Trin.  7  Jac.  resolved  in  Vinyor's 
Case." 

The  reporters  of  these  days  thus  treated  Vynior's  Case 
as  an  authority  on  "Authority,"  rather  than  on  "Ar- 
bitration." The  primary  difficulty  in  these  times  was  in 
the  application  of  the  doctrines  of  authority  to  other  fields. 
We  must  recall  that  neither  Viner,  Rolle,  Brooke,  Fitz- 
herbert  or  Statham  knew  anything  of  the  subject  of  Agen- 
cy or  Contract ;  they  understand  letters  of  attorney  to  make 
livery  of  seizin,  and  the  like. 

Lord  Mansfield  naturally  had  a  surer  grip.  In  1757 
he  says :  *  "  Awards  are  now  considered  with  greater  lati- 
tude and  less  strictness,  than  they  were  formerly.  And  it 
is  right  that  they  should  be  liberally  construed;  because 
they  are  made  by  judges  of  the  parties  own  choosing. 
And  this  is  often  (as  it  is  here),  in  cases  of  small  conse- 
quence, where  the  play  is  not  worth  the  candle."  And 
in  another  case:  "On  a  dispute  about  a  church-rate,  one 
party  offered  a  submission:  But  it  was  contended,  that 
the  matter  being  originally  of  ecclesiastical  cognizance, 
they  should  go  for  a  definitive  sentence  into  that  court. 
Lord  Mansfield — Is  not  a  submission  stronger  than  any 
sentence  ?  If  they  will  not  take  a  submission  offered,  with 
payment  of  full  costs,  I  will  consider  of  it  this  time 
twelve-month. ' '  ^ 

The  difficulty  of  the  early  attempts  to  reason  by  an- 
alogy from  the  subject  of  "powers  of  attorneys"  is  no- 

•  Viner 's  "Abridgment,"  Vol.  3,  p.  417. 

*  Hawkins  v.  Colclough,  1  Burrow  275,  at  p.  277. 
"1  Lofiet's  Rep.  426. 


130  COMMERCIAL  ARBITRATION 

where  better  illustrated  than  in  a  case  reported  by  Ven- 
tris«  (Trippet  v.  Eyre)  1689,  in  Trinity  Term  (4  Jae. 
II).  Two  arbitrators  named  in  a  deed  of  submission  hav- 
ing failed  to  agree,  they  named  an  umpire,  and  when  he 
failed  to  serve,  they  named  another.  Upon  a  suit  upon 
the  bond  accompanying  the  submission  for  the  penalty 
of  £300,  the  court  allowed  a  recovery.  The  defendant 
I)leaded  that  the  arbitrators  having  appointed  one  Jessup 
as  umpire,  and  said  Jessup  having  refused  to  serve,  they 
had  appointed  one  Clark;  in  consequence,  having  once 
exercised  their  power,  the  arbitrators  could  not  exercise 
it  again.  Here  is  a  clue  to  the  reasoning  of  the  Bar  and 
judges  of  this  day.  Powell,  Rokeby  and  Ventris  were  in 
favor  of  the  plaintiff.  Pollexfen,  Chief  Justice,  was  for 
the  defendant. 

"But  it  is  objected,"  reads  the  report,  ''that  the  Arbi- 
trators here  have  executed  their  Authority,  and  'tis  done 
as  fully  as  can  be  on  their  Parts,  and  therefore  they 
have  no  Power  to  name  any  other:  the  Condition  empow- 
ered them  to  name  one,  but  not  to  name  a  second."  To 
which  it  was  answered:  "  'Tis  true,  when  an  Authority 
is  once  fully  executed,  the  Power  is  determined ;  but  here, 
admitting  it  to  be  an  Authority  {ivMch  Ventris  said  it 
was  not  properly  to  be  called  so,  there  "being  no  express 
Authority  given  to  the  Arbitrators,  but  'tis  rather  a  De- 
scription or  Qualification  of  the  Person  which  is  to  make 
the  Award  ut  supra)  ''  yet  there  is  no  compleat  Execu- 
tion." Thereupon  the  learned  judges  discuss  what  tran- 
spires in  law  in  the  case  of  a  "Letter  of  Attorney  be  to  de- 
liver Seizin,  and  the  Attorney  deliver  Seizin  within  the 
View,  which  is  no  good  Execution  of  his  Authority"  and 
they  say:  "Yet  sure  that  does  not  hinder  him  from  de- 
livering Seizin  upon  the  Land,"  etc.  And  accordingly,  "it 
was  surely  the  Parties  Meaning,  if  the  Arbitrators  named 

•2  Ventris  11.3. 
*  Italics  ours. 


EFFECT  OF  COKE'S  DICTUM  131 

a  Man  that  rejected  the  Umpirage,  that  this  should  not 
conclude  them  from  naming  another;"  and  so  gravely 
they  conclude  that  the  nomination  of  Jessup  was  not  a 
nomination  at  all,  hut  a  mere  proposal.  Yet  for  two  pages 
or  more  the  judges  labor  with  each  other  to  determine 
whether  there  might  not  be  two  awards.  Finally  the 
Chief  Justice  concludes  the  discussion  with  this:  '*No 
Case  could  be  put  that  where  a  ]\Ian  that  was  vested  with 
a  bare  Authority,  his  Denial  or  Refusal  to  execute  it  could 
conclude  him;  but  that  notwithstanding  he  might  execute 
his  Authority;  but  if  he  makes  a  void  or  insufficient  Exe- 
cution, he  may  do  it  over  again. ' '  In  the  days  when  prop- 
erty rights  were  chiefly  in  land,  the  making  delivery  of 
seizin  by  ''letter  of  attorney"  was  serious  business.  Ob- 
viously, the  exercise  of  a  power  was  something  of  grave 
concern.  Accordingly,  once  treat  the  appointment  of  an 
arbitrator  as  the  appointment  of  "an  attorney"  and  all 
the  safe  and  prudent  rules  applicable  to  the  creation  or 
exercise  of  powers  of  attorney  came  into  the  foreground 
of  legal  thinking.  So  we  find  the  judges  in  this  case 
{Trippet  v.  Eyre)  in  1689  saying:  "This  is  properly  an 
Authority  in  the  Arbitrators;  'tis  so  taken  in  Vinyor's 
Case  in  8  Co.  and  is  revocable  as  other  Authorities  are." 

That  Coke's  dictum  in  Vynior's  Case  is  based  upon  the 
theory  of  revocability  of  grants  or  powers  not  coupled 
with  an  interest  is  further  developed  in  the  reading  of 
the  discussion  in  Freeman's  Reports  85,  at  p.  88,  where 
in  Thomas  v.  Sorrell  (1673)  the  Court  considers  whether 
or  not  Letters  Patent  from  the  King  to  sell  wine  without 
license  is  not  destroyed  by  a  subsequent  general  statute 
of  Parliament.  Ellis  argued  that  "all  bare  licences  or 
authorities  were  determined  by  the  death  of  the  party  that 
grants  them:  .  .  .  But  where  an  interest  passes,  or  where 
an  authority  is  coupled  with  an  interest,  or  where  a  licence 
is  executed,  these  do  not  determine  by  the  death  of  the 
party"  and  it  is  in  this  connection  he  says:  "A  bare 


132  COMMERCIAL  ARBITRATION 

authority,  though  it  be  made  irrevocable,  may  be  revoked ' ' 
and  for  this  he  cites  Coke  again:  "8  Co.  Vinior's  Case." 
"It  is  too  often  forgotten,"  says  Maitland^  "that,  until 
Elizabeth's  reign,  England  was  a  thoroughly  rustic  king- 
dom, and  that  trade  with  England  was  mainly  in  the 
hands  of  foreigners.  Also  in  medieval  fairs,  the  assembled 
merchants  declared  their  own  'law  merchant,'  which  was 
considered  to  have  a  supernational  validity."  Thus,  says 
he,  "In  the  reports  of  the  Common  Law  courts  it  is  late 
in  the  day  before  we  read  of  some  mercantile  usages  which 
can  be  traced  far  back  in  the  statutes  of  Italian  Cities." 
The  absurd  extent  to  which  the  English  law  courts  car- 
ried this  so-called  "doctrine  of  revocability  of  a  power 
in  its  nature  irrevocable"  appears  still  further  in  Hide  v. 
Fetit,^  wherein  a  reference  hy  coyiseni  of  hoth  parties 
in  an  action  in  equity,  confirmed  hy  order  of  the  Court, 
is  nevertheless  held  to  be  revocable.  There  we  learn  that 
in  a  cause  for  "many  years  depending  in  court"  (and 
even  in  Parliament)  "an  order  was  made  by  consent  of 
both  parties,  to  stand  to  the  award  of  A.  and  B.  Jolleis, 
two  eminent  merchants;"  the  parties  attending  upon  the 
reference.  "Petit  perceiving  that  the  Jolleis  would  con- 
demn him  by  their  award  .  .  .  under  hand  and  seal  re- 
vokes the  authority  given  to  the  arbitrators,  and  retracts 
the  submission;"  nevertheless  the  arbitrators  go  on  and 
make  their  award.  Though  the  case  goes  upon  two  grounds 
— one  "because  some  matters  referred  were  not  deter- 
mined by  the  award,"  the  Lord  Chancellor  (Bridgman), 
assisted  by  Rainsford  and  Wild,  J.  J.,  was  of  opinion,  in 
the  main,  that  "though  it  were  am  abuse  of  the  court 
in  the  defendant  to  retract  his  consent,  after  he  had  at- 
tended the  reference,  having  first  subscribed  the  consent 
under  his  hand ;  yet  such  a  consent,  giving  a  bare  authority 

•Encyclopaedia  Britannica,  11th  Ed.,  Vol.  9,  p.  605,  art.  "English 
Law." 

'Freeman's  Ch,  Eep.   133;    1  Ch.  Caa.  185;   1670.     Italics  ours. 


EFFECT  OF  COKE'S  DICTUM  133 

&nly,  was  revocable."  (A  consent  in  court  to  a  reference 
is  revocable,  because,  forsooth,  it  is  a  "  bare  authority. ' '  ^° 
Here  we  find  the   Court  declaring  solemnly  "That  an 

"The  best  criticism  of  this  theory  is  to  be  found  in  Bell  "Law 
of  Arbitration  in  Scotland,"  p.  267.  He  says  "In  its  most  im- 
portant legal  attributes,  the  contract  of  judicial  reference  is  the 
same,  substantially,  with  the  ordinary  contract  of  submission."  "I 
am  perfectly  sensible  that  there  is  a  difference  between  a  judicial 
reference  and  an  ordinary  private  arbitration.  But  is  it  not  still 
a  contract.  And  what  is  the  contract!  Instead  of  taking  the  chance 
of  the  ordinary  procedure  of  the  Court,  the  parties  agree  that 
the  whole  cause  shall  be  determined  by  the  judgment  of  a  referee  ap- 
proved of  by  the  Court.  Is  it  not  a  bargain — a  transaction — a  binding 
contract  to  that  effect?  What  is  it  but  a  submission,  taking  effect  by 
contract  in  that  particular  form?  The  depending  summons,  and  the 
minute  of  judicial  consent  or  request,  with  the  sanction  of  the  Court 
interposed,  constitute  the  written  submission  to  which  the  statute  of 
Kegulations  refers.  The  particular  form,  perhaps  then  unknown,  sig- 
nifies nothing.  The  substance  of  the  thing,  with  sufficient  form,  is 
quite  clearly  a  submission,  within  the  contemplation  of  the  statute; 
and  that  of  the  most  authoritative  nature,  according  to  its  principle; 
the  contract  being  entered  into,  solemnly,  m  the  face  of  the  Court,  and 
ratified  by  the  express  order  of  the  Court.  The  submission  being 
of  the  depending  process,  and  emanating  from  the  Court,  the  award 
must  come  back  there,  for  the  formal  judgment  on  the  summons, 
and  warrant  for  execution.  But  still,  the  contract  of  submission  is 
complete,  and  the  Court  can  have  no  power  to  infringe  the  con- 
tract. The  powers  of  the  Court,  as  to  any  matter  of  judgment  on 
the  merits  of  the  cause,  have  been  entirely  transferred  by  the  par- 
ties, with  the  sanction  of  the  Court,  to  another  tribunal  of  their 
own  selection;  and  all  that  the  Court  have  to  do,  is  to  see  that  due 
execution  of  that  contract  shall  be  given.  It  is  impossible  that, 
consistently  with  this  principle,  the  Court  can  inquire  into  the 
grounds  of  the  referee's  judgment,  either  in  law  or  in  fact,  when 
there  is  a  general  reference  of  the  cause.  That  would  just  be  to 
break  up  the  contract,  and  take  the  arbiter's  duty,  who  had  been 
ehosen  by  the  parties  for  their  judge,  upon  ourselves.  And,  there- 
fore, I  cannot  give  any  weight  to  the  general  reasoning  here  em- 
ployed, as  to  the  supposed  distinction,  generally,  between  a  judicial 
reference  and  an  extra-judicial  arbitration.  Both  are  submissions, 
making  contract  for  judgment;  and  surely  the  judicial  contract  is 
the  more  sacred  of  the  two."  Per  L.  Moncreiff,  in  Brakenrig  (Dec. 
17,  1841,  4  D.  274).     Italics  ours. 

"When  parties  have  by  contract  agreed  to  a  judicial  reference, 
tJiat  is  a  contract  like  any  other  contract,  and  the  Court  has  no 
more  authority  to  put  an  end  to  that  contract  than  they  would  have 
to  put  an  end  to  a  contract  for  the  sale  of  an  estate  or  the  lease  of 
a  house:  it  is  ii-revocably  binding  upon  the  parties,  unless  they  have 
stipulated  some  mode  by  which  they  may  get  out  of  that  binding 
contract."  Per  L.  Cran worth,  C,  in  Walker  &  Co.  August  14, 
1855,  2  Macq.  424,  at  p.  829. 


134  COMMERCIAL  ARBITRATION 

authority  in  its  nature  is  revocable  by  law,  though  referred 
by  order  of  court."  So  indignant,  however,  is  the  Court 
at  the  conduct  of  the  defendant  "for  his  abuse  of  the 
court  in  retracting  his  consent"  that  it  promptly  issues 
an  attachment  against  him  to  show  cause  why  he  should 
not  be  punished  for  contempt — or,  as  it  is  reported  in 
Ch.  Cases  (p.  185) — "it  was  an  abuse  to  the  court,  as 
it  was  conceived,  to  revoke  it,  for  which  the  court  might 
justly  lay  the  party  by  the  heels."  The  doctrine  of  estop- 
pel seems  not  to  have  been  discussed  or  considered  in 
the  case.  Yet  in  BisJiop  v.  Bishop,^^  where  an  award  was 
made  by  Mr.  Justice  Crook  on  a  reference  of  both  par- 
ties, it  was  held  (Sir  Edward  Littleton,  Lord  Keeper) 
that  if  one  of  the  parties  to  the  award  performed  his 
part,  the  Court  of  Chancery  would  compel  the  other  to 
perform  his,  even  though  the  arbitrament  was  not  made 
by  direction  of  the  Court. 

Two  years  after  Hide  v.  Petit,  a  Bill  is  filed  in  Chan- 
cery ^2  and,  an  account  being  directed,  the  matter  is  re- 
ferred to  one  Phillips  "by  Consent  of  all  Parties,  and  his 
Award  to  be  conclusive."  Phillips  makes  his  award  and 
the  defeated  party  takes  exceptions;  but  the  Court"  held: 
"That  the  Parties  having  bound  themselves  by  Consent, 
they  would  not  look  back  into  the  Award,  and  thereupon 
it  was  confirmed  by  the  Lord  Chancellor."^*  And  in 
1685  ^^  we  discover  Norton  v.  Mascall  concealed  in  the 
comparatively  unknown  "Reports  of  Cases  in  Chancery," 
Vol.  IT,  at  p.  304 — a  case  begun  in  the  reign  of  Charles  II 
and  running  over  into  the  reign  of  King  James  II — in 
which  the  following  appears: 

A  bill  is  filed  in  chancery  to  secure  and  enforce  the 
performance  of  an  award  made  by  arbitrators  upon  "a 

"].5  Car.  I,  f.  59,   1641. 

"Nelson's  Ch.  Rep.  S3,  1673, 

^See  Foss,  Vol.  VII,  p.  6. 

"But  this  case  did  not  appear  in  print  until  1717. 

«36  Car.  2. 


EFFECT  OF  COKE'S  DICTUM  135 

voluntary  submission."  (Nothing  is  said  about  a  deed 
of  submission  or  a  bond  with  penalty — apparently  it  is 
a  mere  submission  by  contract — though  probably  in  ^\Tit- 
ing.)  The  defendant  "insisted,  It  being  a  voluntary  Sub- 
mission of  the  parties,  and  the  Reference  not  directed 
by  this  Court,  the  Award  was  void,  and  ought  not  to  be 
performed."  And,  accordingly,  he  demurred  to  the  Bill. 
The  Master  of  the  Rolls,  Lord  Guilford,  "ordered  Presi- 
dents, and  upon  reading  of  the  Award,  declared,  he  saw 
no  Cause  to  relieve  the  Plaintiff,  but  dismissed  the  Bill." 
But  the  case  was  "Re-heard  by  the  Lord  Chancellor  Jef- 
feries,  who  declared,  he  saw  no  cause  why  the  said  Award 
should  be  impeached ;  hut  it  was  fit  that  the  same  should 
be  performed,  being  in  part  executed  and  assented  unto, 
and  decreed  the  same  to  stand  confirmed,  and  the  Defend- 
ant to  perform  the  same." 

The  Chancellor  Jefferies  here  referred  to  is  none  other 
than  the  notorious  Baron  Jeffreys,  whom  a  contemporary 
English  judge,  Mr.  Justice  Foster,  described  as  the  "very 
worst  judge  that  ever  disgraced  Westminster  Hall;"  ^*  and 
the  decision  is  rendered  almost  contemporaneously  with 
Jeffreys'  holding  of  the  "bloody  assizes,"  the  conduct  of 
which  branded  his  name  with  ' '  indelible  infamy. ' '  ^^ 
Though  the  decision  in  the  case,  as  we  now  perceive,  is  a 
clear  and  unmistakably  sound  application  to  the  subject 
of  arbitrament  of  the  equitable  remedy  of  specific  per- 
formance, it  reposes  quietly  in  this  little  used  and  com- 
paratively unknown  volume  of  "English  Chancery  Cases" 
and  goes  down  the  centuries  unheralded  and  unsung  of 
reporters  or  digest-makers,  while  a  mere  dictum  of  my 
Lord  Coke  is  elevated  to  the  sanctity  of  settled  and  con- 
trolling doctrine.  But  my  Lord  Coke  was  "the  greatest 
lawyer  of  his  day" — his  success  in  Shelly 's  Case  brought 

"5ee  Foss,  Vol.  VII,  p.  226. 

"See  Encyclopaedia  Britanniea,  11th  ed.,  Vol.  15,  p.  309. 


136  ."OMMERCIAL  ARBITRATION! 

him  a  practice  "never  before  equalled."  ^^  The  reputation 
of  Coke's  Reports  was  so  great,  Soule  tells  us,  "that  for 
a  long  time  they  were  cited  simply  as  'The  Reports' 
('Rep')."^^  Yet  mth  all  due  respect — even  homage — 
for  Coke's  learning,  he,  too,  had  his  faults.  He  was 
intensely  arbitrary,  exceedingly  brutal  in  speech,  and  if 
we  are  to  believe  Bacon,  his  intense  rival,  wandered  from 
the  points  of  a  case  and  often  talked  too  much.  Bacon 
once  wrote  Coke:  "In  discourse  you  delight  to  speak 
too  much,  not  to  hear  other  men.  This,  some  say,  be- 
comes a  pleader,  not  a  judge ;  for  by  this  sometimes  your 
affections  are  entangled  with  a  love  of  your  own  argu- 
ments, though  they  be  the  weaker,  and  rejecting  of  those 
which,  when  your  affections  were  settled,  your  own  judg- 
ment would  allow  for  strongest.  Thus  while  you  speak 
in  your  own  element,  the  law,  no  man  ordinarily  equals 
you ;  but  when  you  wander,  as  you  often  delight  to  do, 
you  wander  indeed,  and  give  never  such  satisfaction  as  the 
curious  time  requires. ' '  ^^  Coke,  it  will  be  recalled,  re- 
sisted the  power  of  Chancery  to  touch  any  cause  in  the 
Courts  of  Common  Law  and  even  encouraged  indictments 
of  those  who  applied  to  the  equity  courts  for  relief.  In 
one  case  pending  in  the  Common  Law  courts  he  indicted 
the  counsel  and  solicitor  to  the  parties  and  even  the  Mas- 
ter in  Chancery  to  whom  it  had  been  referred.-^  It  re- 
quired an  appeal  to  the  King  to  reverse  him  and  to  con- 
firm the  Court  of  Chancery  in  all  the  powers  which  it 
claimed,  which  decision  is  acted  upon,  as  Foss  says,  "to 
this  day. "-^  "The  independence  of  his  conduct  as  a 
judge"  was  "not  unmixed  with  the  baser  elements  of 
prejudice  and  vulgar  love  of  authority."  "Full  of  an 
extreme  reverence  for  the  Common  Law  which  he  knew 
so  well,  he  defended  it  alike  against  the  court  of  chan- 

"  EncyclopEDdia  Britannica,  11th  Ed.,  Vol.  6,  p.  654. 
"  Soule 's  Lawyers'  Reference   Manual,  p.  92. 
"Fobs:    "Judges  of  England,"  Vol.  VI,  pp.   118-119. 
''Ibid.,  p.  117. 


EFFECT  OF  COKE'S  DICTUM  137 

eery,  the  ecclesiastical  courts,  and  the  royal  prerogative" 
and  the  verdict  of  history  upon  this  score  is  that  "he 
sought  to  prevent  the  interference  of  the  court  of  chan- 
cery with  eveti  the  unjust  decisions  of  the  other  courts."  ^^ 
The  common  bond  between  equity  and  the  lex  mercatoria 
has  already  been  indicated  by  Carter  in  his  ''History  of 
English  Law.  "23 

We  have  but  to  contrast  the  liberating  influence  of 
Lord  Mansfield  with  the  conservative  tendencies  of  Coke 
to  realize  why,  in  Coke's  time,  the  strict  adherence  to 
the  forms  of  the  Common  Law  retarded  the  development 
of  such  simple  principles  as  estoppel,  mutual  assent,  and 
the  specific  performance  of  contracts. 

Jeffreys,  whose  understanding  of  equity  principles  and 
procedure  is  shown  in  Norton  v.  Mascall  to  be  keener  than 
Coke's,  secures  for  his  decisions  no  such  respect  or  authority 
as  is  freely  accorded  to  Coke — thus  contemporary  history 
punishes  the  unscrupulous  intellect  by  burying  its  good  and 
exposing  its  worst.  "The  evil  that  men  do  lives  after 
them,  the  good  is  oft  interred  with  their  bones." 

Nor  was  Coke  always  accurate.  Says  Veeder:  "Some- 
times, as  in  Gage 's  case,-*  he  gives  a  wrong  account  of  the 
actual  decision.  Moreover  the  authorities  which  he  cites 
do  not  always  sustain  his  conclusions.^^  This  fault,  in- 
deed, runs  through  all  his  writings  and  has  carried  in  its 
train  some  unfortunate  consequences. ' '  ^®  The  similarity 
between  the  error  of  Coke's  dictum  in  the  field  of  com- 
mercial arbitration  with  his  error  in  Pinnell  's  case "  is 
most  striking.     Here,  says  Veeder,-^  "6?/  giving  a  mer^ 

"Encyclopaedia  Britannica,  11th  Ed.,  Vol.  6,  p.  654.    Italics  ours. 

''See  ante,  pp.  79-80. 

»*5  Rep.  45b;  see  1  Salk.  33,  and  Will.  569. 

'^  See  Jones  on  Bailments  41,  as  to  Southcote's  ease,  4  Rep.  83b, 
and  1  Inst.  89a;  Stephen's  "History  of  Criminal  Law,"  ii,  205. 

=» Veeder:  "The  English  Reports,  1537-1865,"  Vol.  II,  "Select 
Essays  in  Anglo-American  Legal  History,"  p.  132. 

"5  Rep.  117a;  Co.  Litt.  212b;  see  Foakes  v.  Beer,  9  App.  Cas.  605. 

"Veeder:    "The   English   Reports,    1537-1865,"   Vol.   II,   "Select 


138  COMMERCIAL  ARBITRATION 

dictum  the  form  and  effect  of  an  actual  decision  upon  a 
point  in  issue  he  fixed  upon  English  law  the  rule  that 
a  creditor  u'ho,  on  the  day  his  debt  falls  due,  accepts  a 
smaller  sum  in  satisfaction  of  the  whole,  hut  executes  no 
deed  of  acquittance,  is  not  bound  by  his  agreement." 
With  the  consequence,  as  Sir  George  Jessel  said  in  Coul- 
dery  v.  Bartrum,^^  that,  according  to  English  law,  "a 
creditor  might  accept  anything  in  satisfaction  of  his  debt 
except  a  less  amount  of  money.  He  might  take  a  horse, 
or  a  canary,  or  a  tomtit  if  he  chose,  and  that  was  accord 
and  satisfaction ;  but,  by  a  most  extraordinary  peculiarity 
of  the  English  Common  Law,  he  could  not  take  19s  6d  in  the 
pound. "  "  Yet, ' '  says  Veeder, ' '  the  House  of  Lords  in  1884 
held  that  the  error  was  so  firmly  established  that  it  did  not 
come  within  their  province  to  correct  it."^**  And  in  the 
limitations  of  the  rule  and  some  of  the  distinctions  en- 
grafted upon  it  by  judges  who  tried  to  limit  the  operation 
of  what  they  believed  to  be  an  erroneous  principle,  we 
shall  find  again  a  striking  analogy  with  the  experiences 
resulting  from  Coke's  erroneous  dictum  in  Vynior's  Case. 
"I  am  afraid,"  said  Chief  Justice  Best,  "we  should  get 
rid  of  a  good  deal  of  what  is  considered  law  in  West- 
minster Hall  if  what  Lord  Coke  says  without  authority 
is  not  law. ' '  ^^  This  is  not  the  only  incident  in  the  evolu- 
tion of  mercantile  law  that  has  been  difficult  of  under- 
standing to  business  men.  In  Gierke  v.  Martin,  the  great 
Lord  Holt  made  what  Cranch''^  calls  "a  hasty,  intem- 
perate decision  .  .  .  which  was  acquiesced  in  by  the  other 
judges,    in    consequence    of    his    overbearing    authority. 

Essays  in  Anglo-American  Legal  History,"  pp.  132-133.  Italics 
ours. 

=»  19  Ch.  Div.  .399. 

«•  Veeder:  "The  English  Reports,  1. 537-1865,"  Vol.  II,  "Select 
Essays  in   Anglo-American  Legal   History,"  p.   133. 

"  Italics  ours. 

"  Cranch :  ' '  Promissory  Notes  before  and  after  Lord  Holt, ' ' 
Vol.  Ill,  "Select  Essays  iu  Anglo-American  Legal  History,"  p.  92. 


EFFECT  OF  COKE'S  DICTUM  139 

'which  made  others  yield  to  him;'  and  that  he  so  'per- 
tinaciously' adhered  to  his  opinion,  as  to  render  it  neces- 
sary to  apply  to  parliament  to  overrule  him."^^  In 
this  connection,  it  is  interesting  to  discover  that  the  old 
judges  were  not  free  from  human  infirmity.  In  Gierke 
V.  Martin  the  report  indicates  that  for  some  reason  or 
other  Lord  Holt  was  exceedingly  irritated  "with  the  gold- 
smiths of  Lombard  Street,  and  that  his  mind  was  not  in 
a  proper  state  for  calm  deliberation  and  sound  judg- 
ment. "^^ 

Reference  has  already  been  made  to  the  fact  that  Coke 's 
reports  were  held  in  so  high  an  estimation  by  his  eon- 
temporaries  that  they  were  cited  simply  as  "The  Re- 
ports. "  ^^  In  fact,  during  the  period  when  they  were 
being  issued  no  others  appeared,  "as  it  became  all  the 
rest  of  the  lawyers  to  be  silent  whilst  their  oracle  was 
speaking. ' '  ^^  Coke 's  ultimate  suspension  from  judicial 
office  by  James  I,  it  will  be  recalled,  was  accompanied  by 
a  regal  command  to  ' '  consider  and  revise  his  reports. ' ' " 
Notwithstanding  this,  he  reported  only  five  trivial  errors. 
His  reports,  in  the  opinion  of  Veeder,  "are  not  reports 


*'Lord  Holt  held,  overruling  all  previous  cases  and  totally  chang- 
ing the  law  as  to  promissory  notes,  admitting  inland  bills  of  ex- 
change to  be  within  the  custom  of  merchants,  but  denying  that 
privilege  to  promissory  notes.  It  took  the  statute  of  Anne  to  re- 
verse Lord  Holt  and  confirm  the  older  authorities  shaken  by  hia 
decision  that  notes  in  writing  were  negotiable  instruments  governed 
by  the  Law  Merchant.  Says  Cranch:  "By  comparing  this  act  with 
the  cases  decided  prior  to  Gierke  v.  Martin,  it  will  be  found  to  con- 
tain no  principles  but  such  as  had  been  fully  recognised  by  the 
courts  of  law.  It  follows,  therefore,  that  it  was  passed  simply  to 
restore  the  old  order  of  things,  which  had  been  disturbed  by  Lord 
Holt. ' ' 

'"Cranch:  "Promissory  Notes  before  and  after  Lord  Holt," 
Vol.  Ill,  "Select  Essays  in  Anglo-American  Legal  History,"  p.  91. 

"Veeder:  "The  English  Eeports,  1537-1865,"  Vol.  II,  "Select 
Essays  in  Anglo-American  Legal  History,"  p.  130. 

^"5  Mod.  viii. 

»^ Veeder:  "The  English  Reports,  1537-1865,"  Vol.  II,  "Select 
Essays  in  Anglo-American  Legal  History,"  p.  131. 


140  COMMERCIAL  ARBITRATION 

at  all  in  the  strict  sense  of  the  term."  Veeder  calls  our 
attention  to  the  fact  that  Coke  himself  says  in  his  preface, 
"that  he  prepared  his  reports  not  merely  for  citation  in 
court  but  also  for  educational  purposes;  and  to  a  large 
extent,  though  just  how  far  it  is  impossible  to  say,  they 
contain  his  oimi  statement  of  the  law.  .  .  .  Since,  to  Coke's 
mind,  the  art  of  pleading  was  the  necessary  foundation 
of  all  accurate  knowledge  of  the  Common  Law,  the  plead- 
ings are  fully  set  out,  not  only  for  a  proper  understanding 
of  the  case  hut  for  the  instruction  of  students  as  well."  ^^ 
He  himself  describes  his  own  method :  ^*  * '  And  now  that 
I  have  taken  upon  me  to  make  a  report  of  their  argu- 
ments, I  ought  to  do  the  same  as  truly,  fully,  and  sincerely 
as  possibly  I  can.  Ilowbeit,  seeing  that  almost  every  Judge 
had  in  the  course  of  his  argument  a  peculiar  method, 
and  I  must  only  hold  myself  to  one,  I  shall  give  no  just 
offense  to  any,  if  I  challenge  that  which  of  right  is  due 
to  every  reporter,  that  is,  to  reduce  the  sum  and  effect 
of  all  to  such  a  method,  as,  upon  consideration  had  of  all 
the  arguments,  the  reporter  himself  thinketh  to  be  fittest 
and  clearest  for  the  right  understanding  of  the  true  rea- 
son and  causes  of  the  judgment  and  resolution  of  the 
case  in  question. ' '  Yet,  says  Veeder,  ' '  His  method  of  pre- 
senting what  was  decided  is,  however,  disorderly  in  the 
extreme.  Throughout  all  parts  of  the  report,  but  par- 
ticularly in  giving  the  resolutions  af  the  judges,  his  in- 
exhaustible learning  breaks  forth;  'one  case  is  followed 
by  another,  quotation  leads  to  quotation,  illustration  opens 
to  further  illustration,  and  successive  inference  is  made 
the  basis  for  new  conclusion ;  every  part,  moreover,  being 
laden  with  conclusions  and  exceptions,  or  protected  in  a 
labyrinth  of  parentheses,  until  order,  precision,  and  often 
clearness  itself  is  lost  in  the  perplexing  though  imposing 

"Veeder:     "The  English   Reports,   1537-1865,"  Vol.  TI,  "Select 
Essays  in  Anglo-Amerieaii  Legal  History,"  p.  131.    Italics  oura. 
"Calvin's  Case,  7  Rep.  4a. 


EFFECT  OF  COKE'S  DICTUM  141 

array.'  "*"  Yet  he  assures  the  reader  that  "although  he 
may  not,  at  any  one  time,  reach  the  meaning  of  his  author, 
yet  at  some  other  time  and  in  some  other  place  his  doubts 
will  be  cleared." 

♦•Veeder:    "The  English  Eeports,  1537-1865,"  VoL  II,  "Select 
Essays  in  Anglo-American  Legal  History,"  p.  132. 


CHAPTER  XI 
WHEREIN  LORD   COKE'S  DICTUM  IS   NOT  FOLLOWED 

Another  great  intellect  succeeded  Coke  as  Chief  Jus- 
tice of  King's  Bench.  Vynior's  Case  was  decided  before 
Coke,  as  Chief  Justice  of  the  Court  of  Common  Pleas. 
Afterwards  he  became  Chief  Justice  of  King's  Bench. 
He  was  succeeded  when  Sir  Henry  Montague  took  the  of- 
fice in  1616.  Four  years  later,  in  Trinity  Term  (18  Jac), 
there  came  before  King's  Bench  an  action  on  the  case 
in  assumpsit  to  abide  by  the  award  of  J.  S.  Sir  Montague, 
before  his  elevation  to  the  bench,  had  for  many  years 
been  Recorder  of  the  City  of  London,  and  upon  his  resig- 
nation from  that  position,  the  Corporation  of  London 
presented  him  with  two  hundred  double  sovereigns  "as 
a  thankful  remembrance  for  his  many  careful  endeavors 
for  the  city."^  While  passing  through  this  experience 
he  must  have  seen  something  of  the  merchants'  boards  and 
tribunals  of  arbitration  then  and  for  a  long  time  previous 
in  operation  in  London.  It  is  no  surprise,  therefore,  to 
find  him  recording  as  law  what  is  even  for  our  times  a 
very  clear  statement  of  the  principles  of  contract  ap- 
plicable to  submissions — especially  the  principle  of  "mu- 
tual assent" — principles  so  much  a  matter  of  common 
acceptation  in  our  day  that  it  is  a  constant  source  of  sur- 
prise to  find  them  so  little  applied — or  even  suggested — 
in  Coke's  day. 

"It  was  Resolved,"  runs  the  report  in  old  French,  by 
the  whole  court,  ''that  mutual  promises  to  abide  hy  the 
award  of  certain  men  are  good  enough  to  hind  them  to 

^Foss:  "Judges  of  England,"  Vol.  VI,  p.  168. 

142 


>VHEREIN  DICTUM  IS  NOT  FOLLOWED      143 

abide  by  the  agreement  and  that  though  no  money  ims 
due  at  the  time  of  the  promise."  Yet  Dodridge,  J.,  said, 
in  dissent,  "That,  in  this  case,  if  the  award  be  that  one 
of  the  parties  shall  pay  money  and  the  other  shall  do 
something  this  is  not  a  good  award." 

And  so  is  Ashton,  the  judge,  overruled  and  Pole,  the 
lawyer,  vindicated.^  Yet  this  case  is  nowhere  abridged, 
nor  is  it  heralded  as  a  leading  case.  Quite  by  accident 
in  our  search  we  found  it  in  the  quaint  original  French 
in  2  Rolle's  Reports,  at  p.  194,  under  the  title  of  ''Browne 
V.  Downing."  March  does  not  refer  to  it;  neither  Viner 
nor  Rolle  abridges  it,  nor  is  it  to  be  found  in  any  of  the 
text  writers  upon  the  subject.  But  in  point  of  legal  value 
— Vynior  was  at  Common  Pleas  and  was  earlier  in  date 
— it  is  superior  as  a  binding  precedent  to  Vynior' s  Case. 

Earlier  still  (1617),  in  King's  Bench,  Montague  re- 
fuses a  writ  of  prohibition  to  a  plaintiff  who  seeks  to 
set  aside  an  award  made  by  arbitrators  upon  the  ground 
that  he  has  newly  discovered  documents  "which  had  come 
into  his  hands,"  justifying  the  setting  aside  of  the  award. 
Per  Curia  (Sir  Henry  Montague,  C.  J.,  John  Croke,  John 
Doderidge  and  Robert  Houghton^)   decides: 

"An  arbitrament  is  res  judicata"  and  "it  is  the  set- 
tlement of  all  controversies  and  if  prohibition  were  al- 
lowed (in  this  case)  then  every  award  could  be  put  to 
question."  (Piir  ceo  que  un  Arhitrement  est  res  judicata, 
&  est  fine  de  controversies,  &  si  ceo  serra  suffer  chescun 
agard  poet  estre  tralie  en  question.)  This  case,  also,  we 
found  by  accident,  in  1  Rolle  380,  decided  14  Jac.  Banco 
Rex.  Easter  Term,  under  the  title  "Jones  vs. ." 

In  1761  we  come  to  a  decision  rendered  in  King's  Bench 
while  Lord  Mansfield  presided  in  that  court.  In  Rex  v. 
Wheeler  *  it  appeared  that  Wheeler  had  bought  two  pipes 

'Ante,  pp.  122-124. 

'See  Foss,  Vol.  VI,  p.  14. 

«3  Burr.  1257. 


144  COMMERCIAL  ARBITRATION 

of  wine  from  one  Tulk,  and  Wheeler  asserted  that  this 
wine  was  adulterated  and  bad,  and  therefore  refused  to 
pay  for  it.  Whereupon  Tulk  sued  him.  At  the  trial, 
as  the  report  says,  "the  matter  was,  hy  consent  of  both 
parties,  (probably,  to  conceal  the  secrets  of  the  trade,  and 
the  nature  and  degree  of  mixing),  referred  to  the  arbi- 
tration of  one  Mr.  Charles  Corderoy;  Wheeler  consented 
to  abide  by  his  award,  and  Not  to  hring  any  hill  in  Equity." 
(The  italics  are  as  they  appear  in  the  original  report.) 
This  agreement  was  made  a  rule  of  court.  Corderoy,  the 
arbitrator,  decided  that  Wheeler  should  pay  Tulk  about 
£20  for  the  wine.  Wheeler  refused  to  abide  by  this  award. 
Instead,  he  moved  to  set  aside  the  award.  The  Court  heard 
him  and  refused  to  set  aside  the  award,  and  then  he  paid 
the  money.  But  he  proceeded  to  the  Court  of  Chancery, 
and,  as  the  decision  tells  us,  "was  so  ill  advised  as  to 
bring  a  long  bill"  to  restrain  the  enforcement  of  the 
award.  Now  reads  the  report:  Thereupon,  this  Court 
brought  him  for  contempt.  On  the  brink  of  being  sent 
to  jail,  he  came  to  terms,  paid  all  the  costs  and  all  the  out- 
of-pocket  expenses  of  Tulk  amounting  to  £87  4  shillings  or 
over  four  times  the  amount  of  the  award.  The  Court 
thought  this  was  punishment  enough;  that  "he  had  smart- 
ed severely:  and  yet,  as  his  contempt  was  so  obstinate, 
they  did  not  care  that  a  slight  sentence  should  stand  upon 
their  records."^  Moreover,  they  thought  "that  the  attor- 
ney and  counsel  were  equally  guilty  of  the  contempt,  and 
more  criminal ;  and  if  it  ever  happened  again,  they  would 
proceed  against  them."^  The  reporter's  admonition  in 
the  note  has  high  moral  value:  "This  case  is  a  strong 
proof  how  far  a  contentious  spirit,  with  bad  advice,  may 
go."  And:  "No  man  would  accept  of  being  an  arbi- 
trator, if  he  was  liable  to  be  harassed  with  a  Chancery-«uit 
for  his  pains."  And  this  case  later  on  is  referred  to  as 
'Italics  the  Court's. 


WHEREIN  DICTUM  IS  NOT  FOLLOWED      145 

authority  in  Davila  v.  Almanza,^  where  a  matter  having 
been  referred  by  the  Court  at  nisi  prius  to  the  three  fore- 
men of  the  jury,  and,  before  the  award  was  made,  one  of 
the  parties  having  served  the  arbitrators  with  a  subpoena 
out  of  Chancery,  "which  hindered  the  proceeding  to  make 
the  award,"  the  Court  held  this  a  breach  of  the  rule,  and 
granted  an  attachment  against  the  offender. 

But  even  in  Coke's  days,  though  some  of  the  judges 
were  highly  technical,  it  will  be  observed  that  not  one 
of  them  finds  anything  contrary  to  public  policy  or  of  the 
nature  of  "ousting  the  courts  of  jurisdiction"  in  these  ar- 
bitraments or  agreements  to  arbitrate.  With  all  his  jeal- 
ous preservation  of  the  Common  Law  court's  jurisdiction 
— fighting  even  the  King  for  the  maintenance  of  its  power 
— Coke  permits  the  plaintiff  to  recover  upon  an  arbitration 
bond  where  the  defendant  revokes  the  submission.  The 
attitude  toward  arbitration  of  all  the  judges  is  throughout 
most  friendly.  Their  difficulties  are  difficulties  of  legal  rea- 
soning and  of  procedural  machinery,  not  of  equitable  pur- 
pose. All  things  considered,  they  produced  fair  results. 
You  could  plead  in  bar  to  trespass  that  there  was  an  ar- 
bitration pending.  If  the  award  was  made,  it  was  res 
judicata.  If  the  defendant  broke  his  obligation  to  submit 
to  arbitration,  whether  by  revocation  or  otherwise,  you 
had  your  bond — which  was  a  very  valuable  remedy.  You 
could  in  those  days  fix  the  penalty  and  the  bond  in  any 
sum  adequate  to  protect  your  client's  rights  in  case  the 
other  party  breached,  and  if  he  revoked  the  submission  or 
interfered  with  the  submission,  he  thereby  made  your  bond 
enforceable.  Thus  in  Noble  and  Harris  (reported  in  III 
Keble's  Reports  745—29  Car.  II  B.  R.  1688),  the  plaintiff 
sued  on  a  bond,  given  "on  condition  to  perform  an 
Award."  The  defendant  pleaded  no  award.  The  plain- 
tiff then  set  out  the  award  and  assigned  the  breach.  The 
defendant  rejoined  that  before  the  award  was  made,  the 

*  1  Salk.  73. 


146  COMMERCIAL  ARBITRATION) 

defendant  revoked  and  the  plaintiff  had  consented  to  the 
revocation.  Upon  the  plaintiff's  demurrer,  it  was  held 
per  Curiam — "the  Bevocation  being  a  breach,  its  7ioi  aided 
by  consent  or  agreement  after,  but  if  it  had  been  said  to 
be  revoked  by  consent  of  the  Plaintiff,  the  penalty  had  been 
saved."  Thus,  Judgment  for  the  Plaintiff  on  the  Bond. 
Not  even  subsequent  acquiescence  in  the  revocation  by  the 
plaintiff  could  save  the  defendant  from  the  penalty  on 
his  bond;  only  revocation  by  mutual  consent  could  pro- 
duce such  a  result. 

In  those  days,  fines  and  penalties  were  enforceable  and 
quite  the  mode  for  obtaining  satisfaction  for  breaches  of 
obligations.  When  fines  and  penalties  were  abolished — 
"but  that's  another  story. ^' 

"We  may  now  recapitulate  the  elements  which  furnish 
explanation  for  this  case  of  "arrested  development"  in 
our  Common  Law. 

1.  A  mere  obiter  dictum,  by  process  of  repetition,  be- 
comes a  doctrine  of  the  law. 

2.  It  becomes  doctrine  by  virtue  of  the  circumstance 
that  (a)  March,  the  first  text-writer  on  the  subject  and 
almost  every  subsequent  text-writer  states  the  dictum  as 
though  it  were  final  and  settled  doctrine;  and  (b)  the  case 
in  which  the  dictum  is  uttered  is  dignified  out  of  all 
proportion  by  the  fact  that  Coke  decided  it  and  reported 
it  as  a  leading  case. 

3.  No  comparative  study  is  made  of  the  earlier  au- 
thorities. 

4.  Though  there  are  earlier  cases  of  clear  and  convincing 
reasoning  and  equal  authority  (especially  Erode  v.  de  Rip- 
ple, 49  Edw.  Ill)  they  are  either  wholly  ignored  by  March 
or  merely  cited  without  consideration  by  Coke  in  7  Jac.  1 
(Vynior's  Case). 

5.  Though  there  were  three  abridgments  of  the  Year 
Books — Statham,  Brooke,  and  Fitzherbert — March  and 
Coke  refer  only  to  Brooke. 


^HEREIN  DICTUM  IS  NOT  FOLLOWED      147 

6.  Brooke  does  not  disclose  the  case  in  49  Edw/  III 
{Erode  v.  de  Ripple)  but  Statham  and  Fitzherbert  do. 

7.  Of  all  the  cases  cited  for  the  obiter  dictum  in  Vynior's 
Case,  only  one  (28  Henry  6)  supports  it  and  at  least  two 
are  against. 

8.  The  original  error  in  reasoning  occurs  in  28  Henry 
6,  where  Pole,  the  advocate,  as  we  now  see,  is  right,  and 
Ashton,  the  judge,  is  wrong;  but  neither  refers  to  the 
earlier  cases. 

9.  Bracton's  Notes,  which  would  have  disclosed  still 
earlier  precedents  contra  to  the  dictum  in  Yynior  and  the 
statement  in  March,  had  not  yet  appeared  in  print. 

10.  At  the  time  of  7  Jac.  the  Courts  were  concerned 
with  such  matters  as  seisin,  feoffment,  seal  and  the  like, 
and  while  deeds  and  bonds  and  indentures  had  value,  ex- 
ecutory contracts  resting  upon  mutual  consent  were  treat- 
ed as  ex  nuda  pacta. 

11.  The  administration  of  law  was  enmeshed  in  a  tan- 
gle of  formal  pleading,  and  an  action  for  damages  for 
breach  of  simple  contract  was  as  yet  unknown. 

12.  The  English  judges  had  not  yet  come  in  contact  with 
the  customs  and  experiences  of  merchants  (Lord  Mans- 
field came  more  than  a  century  later)  and  so  that  which 
was  of  daily  occurrence  in  the  merchants'  courts  or  fairs 
was  as  yet  no  part  of  the  English  common  law. 

13.  The  respect  for  precedent  and  form  precluded  the 
scientific  re-study  or  re-examination  of  the  law  under  new 
conditions. 

14.  The  art  of  reporting  was  in  its  infancy,  and  judges, 
as  well  as  lawyers,  suffered  for  want  of  accessible  and 
accurate  reports  or  digests. 

15.  Later  precedents  of  greater  binding  authority  were 
ignored  by  abridgers  and  buried  in  forgotten  reports. 


CHAPTER  XII 

THE  PASSING  OF  FINES  AND  PENALTIES 

To  establish  damages  for  the  breach  of  a  contract  re- 
quires detailed  proof  of  actual  injury,  and  under  the  strict 
rules  of  evidence  the  injured  party  ofttimes  fails  to  re- 
cover all  that  he  is  entitled  to  for  want  of  technical  proof. 
This  practical  difficulty  led  very  early  in  the  making  of 
contracts  to  the  fixing  of  a  penal  sum  or  fine  which  the 
parties  obligated  themselves  to  pay  each  to  the  other,  in 
the  event  of  a  breach ;  that  is  to  say,  if  A  agreed  to  build 
a  house  for  B  and  to  have  it  finished  by  Miehaelmas,  A 
would  agree  that  in  case  the  building  was  not  completed 
by  that  day  he  would  pay  a  penalty  of  £5  per  day.  Be- 
fore the  statute  of  8  and  9  William  III,  recovery  was  al- 
lowed for  whatever  penalty  was  fixed  in  such  an  agree- 
ment,^ As  the  practice  grew,  penalties  became  the  com- 
mon form  of  fixing  damages,  and,  regardless  of  the  actual 
barm  that  resulted  from  a  breach,  the  penalty  was  en- 
forceable. Thus  though  A's  failure  to  finish  the  house  by 
Michaelmas  might  have  caused  no  real  damage  to  B  at 
all,  nevertheless  the  penalty  would  be  recoverable. 

Gradually  public  opinion  began  to  discountenance  this 
method  of  fixing  damages  by  way  of  punishment.  The 
idea  of  recompense,  rather  than  penalty,  was  more  native 
to  English  justice.  Accordingly,  courts  of  equity  began 
to  accord  relief;  that  is  to  say,  in  cases  of  fraud  or  ex- 
tremity or  accident,  they  would  limit  the  strictly  legal 
remedy  for  the  penalty  so  as  to  cover  the  actual  damages 

*8ee  Whitfield  v.  Levy,  35  N.  J.  Law  Eeporta  149. 

148 


THE  PASSING  OF  FINES  AND  PENALTIES  149 

sustained  by  the  injured  party,^  This  was  permitting 
compensation  on  what  was  called  an  issue  of  quantum 
damnificatus.^  The  statute  of  8  and  9  William  III  was 
intended  to  limit  the  injured  party  to  recovery  of  actual 
damages  arising  out  of  default  in  the  performance  of  an 
agreement  regardless  of  the  penal  sum  fixed  in  the  con- 
tract, so  that  in  a  suit  at  law  after  the  enactment  of  this 
statute  the  injured  party  would  secure  substantially  the 
same  measure  of  relief  in  a  suit  at  law  upon  the  contract 
as  might  have  been  obtained  by  the  intervention  of  a 
court  of  equity.  In  short,  the  purpose  of  the  statute  was  to 
harmonize  the  law  as  it  existed  in  the  Courts  of  Chancery 
with  that  of  the  Common  Law  Courts  and  to  limit  the 
plaintiff  to  his  actual  damages,  in  an  action  of  debt  for 
the  penalty,  the  measure  of  recovery  being  neither  advanced 
to  nor  limited  by  the  sum  named  as  a  penalty.  What  was 
recovered  by  the  plaintiff  was  his  actual  damages,  whether 
they  were  greater  or  less  than  the  penalty.*  Later  on  the 
courts  held  that  penalties  fixed  in  an  agreement  or  bond 
were  against  public  policy,  and  even  where  the  parties  did 
not  use  the  term  "penalty"  but  used  the  words  ** liqui- 
dated damages,"  the  courts  would  not  enforce  the  clause. 
If  the  court  could  see  from  the  whole  instrument  taken 
together  that  there  was  no  intention  that  the  entire  sum 
should  be  paid  absolutely  on  the  non-performance  of  any 
of  the  stipulations  of  the  debt,  they  would  reject  the 
words  and  consider  it  as  being  in  the  nature  of  a  penalty 
only.^  And  conversely,  even  if  the  parties  used  the  term 
"penalty,"  but  it  was  clear  that  it  was  intended  to  be 

"Gary's  R.  1;  Harvard  Law  Tracts  431. 

•2  Story's  Eq.  .Jur.,  §1314.  The  earlier  cases  are  collected  in 
an  elaborate  note  by  Mr.  Evans  in  his  edition  of  the  English  stat- 
utes; "Evans'  Statutes,"  Vol.  3,  p.  324. 

*  Winter  v.  Trimmer,  1  Wm.  Black,  395;  Harrison  v.  Wright,  13 
East  343;  Lowe  v.  Peers,  4  Burr.  2225;   1  Saund.  58  c. 

"Parke,  B.,  in  Green  v.  Price,  13  M.  &  W.  695,  at  p.  701;  Kemble  v. 
Farren,  6  Bing.  141;  Horner  v.  Flintoff,  9  M.  &  W.  678;  Shiell  v. 
M'Nitt,  9  Paige  101. 


150  COMMERCIAL  ARBITRATION 

liquidated  damages,  theywould  permit  the  recovery.  Thus 
in  Sainter  v.  Ferguson,^  a  doctor  agreed  not  to  practice 
at  M.  or  within  a  radius  of  seven  miles  of  M,,  "under  a 
penalty  of  £500."  The  Court  held  that  the  £500  was  not 
to  he  treated  as  a  penalty,  but  as  liquidated  damages,  Colt- 
man,  J.,  saying  "Although  the  word  'penalty,'  which  would 
prima  facie  exclude  the  notion  of  stipulated  damages,  is 
used  here,  yet  we  must  look  at  the  nature  of  the  agree- 
ment, and  the  surrounding  circumstances,  to  see  whether 
the  parties  intended  the  sum  mentioned  to  be  a  penalty 
or  stipulated  damages.  Considering  the  nature  of  this 
agreement,  and  the  difficulty  the  plaintiff  would  be  under 
in  showing  what  specific  damage  he  had  sustained  from 
the  defendant 's  breach  of  it,  I  think  we  can  only  reasonably 
construe  it  to  be  a  contract  for  stipulated  and  ascertained 
damages." 

Now  there  was  nothing  more  difficult  for  the  old 
draughtsmen  of  contracts  in  safeguarding  their  clients' 
interests  than  to  draw  an  agreement  of  arbitration  which 
would  be  effective  in  case  of  a  breach.  If  A  and  B  agreed 
to  submit  to  arbitration  a  difference  between  them,  in  case 
B  revoked  the  arbitration  what  were  A's  damages?  The 
very  subject  matter  of  the  controversy  was  in  dispute.  If 
A  claimed  that  B  owed  him  a  thousand  pounds  and  B 
claimed  that  he  did  not,  of  course,  if  B  revoked  the  ar- 
bitration A's  damages  could  hardly  be  treated  as  one  thou- 
sand pounds.  Whether  or  not  he  was  entitled  to  the  thou- 
sand pounds  was  dependent  upon  the  decision  of  the  ar- 
bitrator, and  if  the  arbitrator  made  no  decision,  as,  of 
course,  he  could  not,  after  the  agreement  was  revoked, 
how  were  you  to  fix  A's  damages  except  by  trial?  So 
long  as  it  was  permissible  to  fix  a  penalty,  you  could  easily 
say  that,  in  case  either  party  revoked,  in  such  a  case  as 
the  one  suggested,  he  should  pay  to  the  other,  say,  five 
hundred  pounds.     But  obviously,  this  is  a  penalty,  and 

•  7  M.,  G.  &  S.  716,  at  p.  727. 


THE  PASSING  OF  FINES  AND  PENALTIES  151 

imder  the  rule  gradually  established  in  courts  of  equity 
and  finally  made  into  statute  law  by  the  enactment  of  8 
and  9  William  III,  it  was  void.  In  consequence,  the  relief 
which  Vynior  secured  upon  the  bond  when  "Wilde  broke 
the  agreement  to  arbitrate  was  no  longer  to  be  obtained. 
All  that  you  could  recover  was  the  damages  that  you  sus- 
tained by  reason  of  the  defendant's  refusal  to  go  on  with 
the  arbitration,  and,  as  Fletcher  Moulton  says  in  Dole- 
man  &  Sons  V.  Ossett  Corporation,'^  "It  will  be  evident, 
however,  that  the  remedy  in  damages  must  be  an  inef- 
fective remedy  in  cases  where  the  arbitration  had  not  been 
actually  entered  into,  for  it  would  seem  difficult  to  prove 
any  damages  other  than  nominal."  So  that  the  result 
of  Coke's  dictum  in  Vynior's  Case,  plus  the  enactment 
of  the  statute  forbidding  fines  and  penalties,  was  to  leave 
the  injured  person  practically  without  remedy.  He  could 
sue  for  his  damages,  and  the  damages  would  be  limited  to 
the  nominal  expense  that  he  had  been  put  to  in  preparing 
for  the  arbitration.  What  he  really  wanted  was  either 
a  fixed  penal  sum  upon  which  he  could  rely  at  the  mo- 
ment he  entered  into  the  agreement  to  arbitrate,  or  else 
some  judicial  machinery  by  which  the  recalcitrant  de- 
fendant could  be  forced  to  go  on  with  the  arbitration.  In 
other  words,  what  should  have  been  granted  to  him  was 
specific  performance;  that  is  to  say,  the  defendant  should 
be  required  to  submit  to  arbitration.  If  he  failed  to  nom- 
inate his  arbitrator,  then  the  court  should  have  been  per- 
mitted to  nominate  someone  for  him,  and  the  arbitration 
should  be  proceeded  with.  The  abolition  of  fines  and  pen- 
alties, therefore,  brought  about  the  present  incongruous 
state  of  the  law  where  the  party  injured  by  breach  of  an 
agreement  to  arbitrate  is  practically  without  remedy.  First, 
the  courts  limited  the  party  to  his  action  upon  the  bond ; 
then  they  took  away  the  penalty  on  the  bond;  then  they 
said  they  would  not  enforce  the  agreement  by  specific  per- 

*L.  R.  [1912]  3  K.  B.  D.  257,  at  p.  268. 


152  COMMERCIAL  ARBITRATION 

formance,  and  thus  they  left  the  situation  in  such  shape 
that  the  clever  but  dishonest  merchant  can  speculate  on  the 
outxjome  of  an  arbitration,  and,  when  he  sees  how  the 
arbitrator's  mind  is  going,  withdraw  from  the  arbitration 
without  danger  of  any  substantial  liability. 


CHAPTER  XIII 

"OUSTING  THE  COUETS  OF  JUEISDICTION " 

To  discover  the  genesis  of  this  phrase  as  applied  to 
covenants  of  arbitration,  we  have  gone  to  the  reports  of 
the  eases  of  the  days  in  which  it  originated  and  examined 
them  volume  by  volume,  disregarding  for  the  purposes 
of  the  search  all  of  the  digests  and  reviews.  We  think  it 
may  be  safely  said  that  the  roots  of  this  curious  doc- 
trine of  the  law  are  to  be  found  in  the  following  group 
of  cases: 

Kill  V.  Eollister,  in  King's  Bench  (18  Geo.  II  1746) 
(1  'Wils.  129).  The  report  of  this  case  requires  but  eleven 
lines.  The  action  is  upon  a  policy  of  insurance.  The 
policy  contains  a  clause  that,  in  case  of  any  loss  or  dis- 
pute, the  matter  shall  be  referred  to  arbitration.  The 
plaintiff  sets  up  that  there  had  been  no  reference.  Upon 
the  trial  at  Guildhall  the  point  is  reserved  for  the  con- 
sideration of  the  Court,  whether  this  action  is  well  laid 
before  there  has  been  a  reference.  And  by  the  whole  court 
it  was  decided  that,  if  there  had  been  a  reference  pending, 
"or  made  and  determined,  it  might  have  been  at  (si<:) 
bar,  but  the  agreement  of  the  parties  cannot  oust  this 
court ;"'^  and  as  there  has  been  no  reference  nor  is  any 
pending,  "the  action  is  well  brought.  ..."  There  is  no 
discussion  and  no  citation  of  authority.  Observe  that  the 
Court  would  regard  the  defense  as  good  if  the  arbitration 
were  pending. 

Eill  V.  HoUister  is  cited  and  discussed  in  Mitchell  v. 
Harris    (1793),    2   Yesey   Jr.'s   Reports   129,   at  p.   131. 

^  Italics  ours. 

153 


164  COMMERCIAL  ARBITRATION 

The  latter  case  is  a  bill  for  a  discovery  in  aid  of  a  suit 
over  partnership  articles.  It  was  pleaded  in  bar  that 
the  articles  contained  a  covenant  to  refer  all  .differences 
to  arbitration.  The  Attorney  General,  Sir  John  Scott, 
afterwards  Lord  Eldon,^  and  Mr,  Mansfield  for  the  Plea 
say: 

"There  is  no  sense,  in  what  is  said  in  Kill  v.  Hollister, 
1  Wils.  129,  that  such  covenants  cannot  be  permitted,  as 
the  agreement  of  the  parties  cannot  oust  the  jurisdiction 
of  the  Court.  It  is  not  ousted  more  than  hy  a  release 
of  all  right  of  action."  Was  he   right? 

The  Solicitor  General  for  the  other  side  admits  in  the 
course  of  his  argument  "that  an  action  might  be  brought 
against  them  for  not  bringing  it  to  arbitration,"  to  which 
Lord  Chancellor  Loughborough  said:  "Do  you  know  any 
case,  in  which  an  action  has  been  brought  on  such  a  cov- 
enant? In  that  case  in  Wilson  (meaning  Kill  v.  Hollister) 
it  came  out  in  evidence  upon  the  assumpsit.  Suppose  an 
action  brought  upon  the  covenant  for  not  referring  it,  but 
proceeding  at  law;  what  would  be  the  damages?" 

To  which  counsel  reply :  ^  "If  there  were  only  nom- 
inal damages,  it  would  make  the  point  good  .  .  .  Lord 
Hardwicke  says,  this  Court  must  give  relief  upon  a  bill 
for  discovery,  in  order  to  go  to  arbitrators,  for  this  extraor- 
dinary reason,  that  it  is  not  suitahle  to  the  dignity  of 
this  Court  to  give  a  discovery  for  the  purpose  of  an  ar- 
hitration."  He  refers  to  Wellington  v.  Mackintosh,  2  Atk. 
569  (1743).  To  which  the  Lord  Chancellor  said:  ''There 
is  no  doubt,  that  the  reporter  has  mistaken  Lord  Hard- 
wicke's  reasons  in  that  case.  He  has  only  taken  down 
part  of  what  was  said,  and  has  misapplied  thut;  hut  still 
the  case  .stands  as  a  clear  authority,  that  the  plea  was 

'Encyclopaedia  Britannica,   lltli  Ed.,  Vol.  9,  pp.   166,  168. 

*  There  is  cited  a  footnote  reference  to  Bowley  v.  Young,  3  Day 
118,  whore,  alter  revocation,  the  plaintiff  is  permitted  to  recover  the 
costs  of  the  suit  at  law,  as  well  as  those  arising  under  the  sub- 
mission.    Italics  ours. 


"OUSTING  THE  COURTS  OF  JURISDICTION"  155 

overruled.^'  The  argument  of  the  Court  here  runs:*  "It 
struck  me,  that  no  such  clause  could  by  possibility  stop 
the  discovery;  but  that  some  time  or  other  a  discovery  of 
the  matters  supposed  to  be  concealed  must  be  had.  This 
is  not  inconsistent  with  a  subsequent  submission  to  arbi- 
tration. The  discovery  will  leave  the  party  to  decide 
whether  to  bring  an  action  or  not."  What  was  here  con- 
sidered was  how  to  give  the  plaintiff  discovery,  if  he 
needed  it,  either  before  or  after  the  arbitration;  there  is 
nothing  in  the  Court's  opinion  indicating  that  it  regards 
the  clause  itself  as  void  or  against  public  policy. 

Then  comes  this  suggestion:  "There  is  another  clause 
in  these  articles,  that  the  award  shall  be  final.  That  is 
more  than  the  law  allows  to  any  judgment.  If  a  judgment 
at  law  was  obtained,  a  bill  showing  that  it  was  obtained 
against  conscience  by  concealment,  would  open  it  to  relief 
in  this  Court.  If  matter  of  Equity  arose  out  of  the  award, 
I  take  it,  the  Court  would  open  it."  But  the  learned 
Chancellor  misunderstood  the  meaning  of  ' '  final. ' '  It  was 
no  more  final  than  a  release.  Equity  could  relieve  upon 
the  same  familiar  grounds  as  it  could  relieve  from  a  re- 
lease obtained  against  conscience  or  where  matter  of  equity 
could  be  shown.  And  so  counsel  for  the  plaintiffs  said  to 
the  Court :  "In  Burton  v.  Ellington,  in  the  Common  Pleas, 
your  Lordship  determined,  that  where  evidence  is  fraud- 
ulently withheld  before  arbitrators,  you  would  not  pre- 
vent the  party  from  going  to  a  Court  of  Equity  for  a 
discovery."  Whereupon  the  Lord  Chancellor  says:  "Cer- 
tainly not ' '  and  then  puts  this  question :  ' '  Have  you  found 
any  case,  in  which  an  agreement  to  refer  has  been  set 
up  as  a  bar  to  an  action  ? ' ' 

The  very  early  authorities  which  we  have  reviewed  are 
not  brought  to  the  Court 's  attention ;  there  is  no  con- 
sideration given  to  the  law  of  arbitration  generally,  no 
consideration  of  its  history  or  use ;  no  text- writers  on  the 

*  2  Ves.  Jr.  129,  at  p.  135.    Italics  ours. 


166  COMMERCIAL  ARBITRATION 

subject  are  consulted.  The  Court  accepts  the  unreasoned 
expressions  in  "Wilson  {Kill  v.  Hollister)  as  the  only  ex- 
isting authority  at  Common  Law  upon  the  subject,  the 
Chancellor  saying:  "I  have  looked  into  many  cases  at 
law,  where  the  subject  of  reference  became  afterwards  the 
subject  of  action;  and  it  is  not  said  in  any,  that  a  mere 
agreement  to  refer  can  take  away  the  jurisdiction  of  any 
Court  in  Westminster  Hall."  His  search  was  not  com- 
plete, as  we  have  seen.  "As  no  such  attempt  has  ever 
been  made,  it  would  be  a  great  novelty  to  allow  this  plea ; 
and  therefore  it  must  be  overruled."  Thus,  the  Court 
finding  no  precedents,  and  counsel  citing  none,  the  plea 
is  treated  as  too  novel  to  support  itself,  and,  accordingly, 
held  to  be  of  no  value.  And  so  a  precedent  is  made,  and 
the  subject  is  no  longer  novel. 

But  Halfhide  v.  Fenning,^  decided  but  five  years  earlier, 
was  in  fact  a  precedent  contra.  There  a  bill  is  brought 
for  an  accounting  between  partners.  The  defendant  pleads 
that  by  the  articles  of  co-partnership  all  differences  which 
might  arise  were  to  be  referred  to  arbitration,  and  that 
the  matter  in  dispute  had  not  been  so  refeiTcd.  The  plea 
is  held  good.  This  case  was  later  than  Lord  Hardwicke's 
decision  in  Wellington  v.  Mackintosh,  2  Atk.  569,  and  ex- 
pressly overrules  it.  It  is  later,  also,  than  Kill  v.  Hollis- 
ier,  and,  therefore,  overrules  Kill  v.  Hollister.  Lord  Ken- 
yon  here  says:  "There  can  be  no  doubt,  but  that  parties 
entering  into  an  agreement  that  all  disputes  shall  be  re- 
ferred to  arbitration,  are  bound  by  such  agreement.  The 
legislature  has  countenanced  such  agreements  by  the  act  of 
"William  3,  for  facilitating  the  execution  of  them.  .  .  .  Such 
references  are  very  advantageous  to  the  parties;  as  arhi^ 
trotors  are  more  competent  to  the  settling  of  complicated 
accounts  than  the  officers  of  courts  of  law  or  equity."^ 
Was  he  right? 

'Half hide   v.    Fennvng,   2    Brown's   Chancery    Cases   336    (1788). 
•Italics  ours. 


"OUSTING  THE  COURTS  OF  JURISDICTION"  157 

The  reporter  says  in  a  footnote  to  this  case :  *  *  This  case 
is  universally  held  to  be  against  the  law  and  practice  of 
our  Courts.  It  has  always  been  held  'a  singular  case, 
and  in  direct  opposition  to  Lord  Hardwicke's  decision  in 
Wellington  v.  Mackintosh,  2  Atk.  569 ;  besides  that  it  has 
since  been  repeatedly  over-ruled.'  "  But  in  1844,  as  we 
shall  see  later,  Lord  Chancellor  Sugden  says:  ^  '^I  think  that 
Half  hide  v.  Fenning  is  still  law." 

Furthermore,  the  reporter  in  Mitchell  v.  Harris  says  it 
is  now  well  settled  "as  an  undoubted  general  rule,  that  a 
mere  agreement  to  a  reference  does  not  estop  a  party 
from  applying  to  a  Court  of  Equity  to  determine  his 
rights;  but,  where  the  submission  to  reference  has  been 
made  a  rule  of  a  Court  of  Law  (or  either  party  has  a 
right  to  make  it  such,  Davis  v.  Getty,''  Sim.  &  Stu.  414), 
it  is,  to  say  no  more,  extremely  doubtful,  whether  even 
fraud  will  authorize  Equity  to  interfere;  Auriol  v.  Smith, 
Turn.  127;  Dawson  v.  Sadler,  1  Sim.  &  Stu.  541.  .  .  ." 
Now,  though  Vynior's  Case  is  nowhere  directly  cited  in 
these  cases,  the  decision  of  these  days  is  directly  traceable 
to  its  influence.  We  have  seen  how  it  affected  the  Court 
in  Hide  v.  Petit,  in  Milne  v.  Gratri^  (7  East.  608),  and  in 
King  v.  Joseph  (5  Taunt.  452).  Studying  the  footnote 
(Note  3)  to  Mitchell  v.  Harris,  the  reporter  gives  us  the 
clew: 

"Not  only  a  parol  submission  to  arbitration,  but  even 
a  submission  by  deed,  may  be  revoked,  at  any  time  before 
the  award  is  made,  although  the  submission  should,  after 
such  revocation,  be  made  a  rule  of  Court ;  in  such  case,  no 
contempt  of  Court  is  committed,  which  can  be  punishable 
by  attachment ;  and,  even  if  the  submission  had  been  made 
a  rule  of  Court  previously  to  its  revocation,  notwithstand- 
ing this  revocation  would  be  a  contempt  for  which  the 

^  Bimsddle  v.  Bobertson,  2  Jones  &  La  Touche's  Eeports  58.  Italici 
ours. 


168  COMMERCIAL  ARBITRATION 

party  might  be  attached ;  still,  it  seems,  no  award  could 
be  made,  the  specific  execution  of  which  could  be  en- 
forced. The  arbitrators,  however,  would  do  right  in  after- 
wards proceeding  to  make  their  award ;  because  the  party, 
continuing  in  submission,  will  be  entitled  to  his  action 
for  damages,  on  non-performance  of  the  covenant  by  the 
other  party  to  abide  the  award:  or,  if  the  bond  contain 
an  obligation  to  pay  a  certain  penalty,  in  the  nature  of 
liquidated  damages,  although  the  obligee  may  still  revoke 
his  submission,  he,  of  course,  by  so  doing,  forfeits  the 
penalty  of  the  bond.  Milne  v.  Gratrix,  7  East,  611 ;  King 
V.  Joseph,  5  Taunt.  453." 

Though  the  reporter  states  that  it  follows  as  a  necessary 
corollary  that  "a  bill  for  specific  performance  of  an  agree- 
ment to  refer  to  arbitration,  would  not  hold"  (citing  Gour- 
ley  V.  Duke  of  Somerset,  19  Ves.  431  and  Agar  v.  MacJclew, 
2  Sim.  &  Stu.  423)  nevertheless  "a  Court  of  Equity  will 
not  be  disposed  to  listen  to  any  interlocutory  motion  on 
behalf  of  a  party  who,  udthouf  just  grounds,  refuses  to 
abide  hy  such  agreement"  ^  (citing  Waters  v.  Taylor,  15 
Ves.  16^)  ;  *'and  it  would  be  quite  impossible,"  says  he, 
"that  a  party,  who,  by  revoking  a  submission  which  has 
been  made  a  rule  of  Court,  has  been  guilty  of  a  contempt, 
should  obtain  special  relief,  in  the  same  cause,  from  the 
Court  whose  order  he  has  violated,  contrary  to  his  en- 
gagement. Supposing  his  revocation  to  be  legally  valid, 
it  is  not  a  ease  in  which  he  has  any  reason  to  hope  for 
the  aid  of  Equity"  (citing  Harcourt  v.  Bamshottowr,  1  Jac. 
&  Walk.  511). 

In  short,  according  to  the  reporter,  you  may  punish, 
as  for  contempt  of  court,  the  man  who  revokes;  you  may 
deny  him  relief  in  a  court  of  equity  because  he  does  not 
"come  in  with  clean  hands";  but  if  he  brings  suit  in 
violation  of  his  agreement,  it  is  no  plea  in  bar  that  by 

'Italics  oura. 

*  See  post,  p.  161. 


"OUSTING  THE  COURTS  OF  JURISDICTION"  159 

so  doing  the  Court  will  aid  and  abet  him  in  his  iniquity. 
Yet  "The  ethical  impropriety  of  the  .  .  .  revocation  at 
such  a  stage  in  the  proceedings  is  obvious  ..."  {Toledo 
8.  S.  Co.  V.  Zenith  Transp.  Co.,  184  Fed.  Rep.  391,  at  p. 
396  [1911]  per  Hollister,  J.).^^ 

Now,  it  is  to  be  observed  that  none  of  the  Chancellors 
was  wholly  opposed  to  arbitration.  What  concerned  them 
was  giving  the  aid  of  Chancery  to  either  party,  in  spite 
of  the  arbitration,  where  "matter  of  equity"  arose.  This 
is  made  clear  in  the  later  ease  (1807-8)  of  Waters  v.  Tay- 
lor,'^^  where  Lord  Eldon  (in  spite  of  his  animadversions 
upon  arbitration  in  Street  v.  Righy  ^^)  says  that  where  the 
parties  have  provided  a  forum  for  themselves  it  "shows 
their  intention  against  the  interference  of  any  other  juris- 
diction, until  they  have  tried  the  effect  of  the  special  means, 
provided  by  themselves;  and  that  course,"  says  Lord  El- 
don, "which  is  familiar  in  the  common  case  of  partner- 
ship, is  more  especially  to  be  adopted,  where  the  parties 
have  themselves  expressed  that  intention,"  Here  there  were 
partnership  articles  for  the  management  of  the  Italian 
Opera  House.  The  articles  contained  provisions  for  ar- 
bitration. The  plaintiff,  one  of  the  parties,  brought  suit 
in  equity  for  injunction,  receivership,  etc.  The  headnote 
of  the  case  is:  "Although  an  agreement  to  refer  disputes 
to  arbitration  is,  generally,  no  objection  to  a  suit  in  a  Court 
of  Equity,  yet  upon  the  nature  of  the  subject,  the  man- 
agement of  the  Opera  House,  and  the  anxious  provision 
of  the  parties  for  arbitration,  the  Court  refused  upon  mo- 
tion to  interfere  iefore  they  had  taken  that  course."  ^^ 

"  Here,  at  p.  396,  the  source  of  the  revocability  theory  is  given 
as  Morse  on  Arbitration,  p.  437,  Vynior's  Case.  The  Court  says  "the 
strictness  of  the  rule  grew  out  of  the  jealousy  of  the  common-law 
judges  in  early  times  of  their  jurisdiction,  and  of  their  fear  lest 
encroachments  might  be  made  upon  it  (Morse  on  Arbitration,  436), 
while  in  the  modern  view  and  practice  the  settlement  of  disputes 
by  arbitration  are  encouraged  by  the  courts.  ..." 

"  15  Vesey  Jr.  10. 

^\^ee  post,  p.  162. 

"  Italics  ours. 


160  COMMERCIAL  ARBITRATION 

And  in  the  report  itself  we  read  that  the  Lord  Chancellor 
(Eldon)  '^ suggested  the  absolute  necessity,  thut  these  par- 
ties sJiould  go  to  arbitration;'^  "^^  and  gives  as  his  reason 
that  "it  is  much  more  wholesome,  where  the  parties  have 
contracted  for  this  mode  of  settling  their  differences,  and 
the  point  of  dispute  is  one,  which  is  expressly  provided 
for,  to  let  them  try,  whether  they  cannot  so  settle  it;  than 
that  this  Court  should  interpose  upon  this  sort  of  summary 
application."^^  And  so  "The  parties  afterwards  went  to 
arbitration ;  and  an  award  was  made  .  .  . "  ^^ 

Lord  Eldon  expressly  qualifies  the  decision  of  Lord  Hard- 
wieke  in  Wellington  v.  Mackintosh.  He  says:  "Taking  the 
general  doctrine  now  to  he  according  to  Lord  Hardwicke's 
opinion,  which  goes  upon  the  principle,  that  this  Court 
has  powers  of  inquiry  beyond  those  of  an  arbitrator,  do 
any  of  those  cases  go  the  length  of  such  a  special,  anxious, 
provision  for  arbitration  as  this ;  "  applying  to  every  case, 
in  which  a  difference  could  arise ;  and  stipulating  express- 
ly, not  only  that  the  arbitrators  shall  determine  upon 
evidence,  but  that  they  shall  be  at  liberty  to  use  all  other 
ways  and  means  to  enable  them  to  decide,  that  they  shall 
think  fit :  the  parties  evidently  anxious  to  exclude  this  juris- 
diction upon  a  subject,  to  which  certainly  it  is  very  inade- 
quate?"^" 

In  short,  Lord  Eldon  did  not  find  anything  offensive  to 
equity  in  parties  agreeing  to  exclude  the  court  of  juris- 
diction. He  himself  had  said  as  counsel  in  Mitchell  v. 
Harris  that  there  was  "no  sense"  in  the  holding  in  Kill 
V.  Tlollister  that  agreements  of  the  parties  "cannot  oust 
the  jurisdiction  of  the  Court."  And  his  argument  is  as 
sound  today  as  it  M^as  then.  The  Court  is  not  "ousted 
more  than  by  a  release  of  all  right  of  action."     And  in 

"  1.5  Vesey  Jr.  10,  at  p.  12.    Italics  ours. 
"  Ibid.,  p.  19.     Italics  ours. 
^'Ibid.,  p.  20. 
"  Italics  ours. 


"OUSTING  THE  COURTS  OF  JURISDICTION"  IGl 

Waters  v.  Taylor,  he  refers  to  the  litigation  of  the  parties 
as  "calling  down  upon  them  an  interposition,  perhaps 
not  the  most  ruinous,  but  that  cannot  take  place  without 
infinite  mischief  to  all,  who  may  have  any  interest  in  the 
subject,"  and  so  ''I  shall  give  them  an  opportunity  to 
pause;  and  consider,  whether  they  will  press  for  my  de- 
termination, or  have  their  disputes  determined  by" — note 
the  language  here — "that  more  wholesome  mode,  which 
they  have  themselves  provided."^'' 

In  Waters  v.  Taylor  an  application  was  made  for  a  re- 
ceivership and  the  Lord  Chancellor  permitted  the  arbi- 
trators to  determine  the  very  question  of  whether  there 
should  be  a  receiver,  even  permitting  them  to  name  a  man- 
ager for  the  opera  house,  for  he  says:  "Whatever  may 
be  the  law  of  this  Court  as  to  the  capacity  of  parties  by 
stipulation  to  deprive  themselves  of  the  right  to  resort  to 
a  Court  of  Justice  in  the  first  instance,  and  taking  the 
law  to  be,  that  a  man  cannot  bind  himself  to  forbear  to 
come  here,  until  an  arbitration  has  been  had,  in  almost 
every  line  of  this  deed  of  1803,  upon  which  the  suit  is 
instituted,  the  parties  have  expressed  the  greatest  anxiety 
to  keep  out  of  Court;  if  they  could  in  any  manner  arrange 
their  disputes  hy  arhitration."  ^^  And  so  he  steadfastly 
refuses,  even  upon  a  third  application  and  after  the  ar- 
bitrators had  decided,  to  interpose  the  aid  of  Chancery, 
saying,  "if  they  will  not  settle  their  own  interests,  it  is 
immaterial,  whether  the  consequences  shall  be  produced  by 
their  own  acts  or  by  mine. ' '  ^^ 

Thus  it  was  clearly  Lord  Eldon's  opinion  that  these 
agreements  were  wholesome  and  should  be  enforced,  un- 
less there  were  strong  equitable  grounds  for  intervention 
by  a  Court  of  Chancery,  as  where  a  discovery  was  re- 
quired in  aid  of  an  accounting  by  arbitrators.     As  Sir 

"  Italics  ours. 

^'  15  Vesey  Jr.  10,  at  p.  22.    Italics  ours. 

"Ibid.,  p.  28. 


162  COMMERCIAL  ARBITRATION 

John  Scott,  in  Halfhide  v.  Penning  (supra),  he  had  tried 
to  convince  Lord  Kenyon  that  the  plea  of  an  agreement 
to  arbitrate  differences  did  not  preclude  a  bill  for  a  dis- 
covery, though  it  might  be  a  good  plea  to  the  relief.  And 
Lord  Kenyon  in  that  case,  as  -we  have  seen,  would  not  go 
with  him. 

But  Lord  Eldon  had  had  a  bitter  experience  with  ar- 
bitration while  at  the  Bar,  as  he  tells  us  in  his  opinion  in 
Street  v.  Bighy'^^-  (1802).  He  had  been  counsel  in  Frice 
V.  Williams,^^  where,  as  he  reports  in  Street  v.  Eighy,  a  bill 
for  specific  performance  of  an  arbitration  agreement  was 
filed.  Lord  Thurlow  refused  specific  performance,  but 
referred  the  matter  to  a  master  whose  report  was  very 
favorable  to  Lord  Eldon 's  client,  ''the  result  being,  that 
a  very  small  sum  was  due  from  him."  Thereupon,  "A 
vast  number  of  exceptions  were  taken ;  and  the  Court  felt 
that  sort  of  difficulty  of  dealing  with  the  exceptions,"  and 
this  "led  to  an  arbitration;  though  at  first  the  Court 
would  not  hear  of  it. ' '  And  so,  reports  Eldon,  '  *  the  party, 
who  had  not  been  able  to  establish  any  thing  before  the 
Master,  in  that  mode  gained  several  thousand  pounds." 
"Then,"  says  he,  "the  difficulty  occurred  about  the  power 
of  this  Court  to  review  the  decision  of  arbitrators;  and 
in  the  end  my  client  fared  much  worse  than  he  would 
have  done  before  the  Master."  This  experience  raised 
in  his  mind"  "considerable  doubts,  whether  the  eulogia 
upon  the  domestic  forum  of  arbitrators  are  well  founded" 
and  that  case  and  others  led  him  "to  adopt  a  rule  never 
to  advise  an  arbitration  afterwards. "  ^^  Yet,  as  we  have 
seen,  five  years  later,  in  Waters  v.  Taylor,  he  had  already 
overcome  the  sting  of  disappointment  in  Price  v.  Williams 
and  was  broad-minded  enough  to  apply  rigorously  to  the 

"6  Vesey  .Tr.  814,  at  p.  817. 

"  3  Bro.  C.  C.  163;  1  Vesey  Jr.  365.  This  report  does  not  give  the 
earlier  history  of  the  case. 

"6  Vesey  .Jr.   814,  at  p.    818. 
""lUd.,  p.  819. 


"OUSTING  THE  COURTS  OF  JURISDICTION"  163 

parties  the  agreement  to  arbitrate  which  they  had  made, 
though  it  meant,  in  effect,  an  actual  determination  of  the 
court's  jurisdiction. 

If  we  make  a  reasonable  allowance  for  the  disappoint- 
ment with  some  arbitrations  which  Lord  Eldon  shared  with 
others  at  the  Bar,  we  shall  find  in  the  decisions  of  the 
chancellors  of  his  day  no  evidence  of  real  hostility  to 
arbitration  agreements  as  such,  and  no  determination  to 
hold  them  void  as  against  public  policy.  These  judges 
were  concerned  only  with  preserving  that  jurisdiction  of 
the  equity  courts  which  would  relieve  the  parties  of  any 
situation  that,  in  spite  of  the  written  word,  was  "against 
conscience."  Lord  Eldon  concedes  in  Street  v.  Righy  that 
his  own  argument  in  Halfhide  v.  Fenning  was  unsound  for 
the  reason  that  when  the  parties  agree  to  arbitrate  they 
mean  "this,  if  any  thing;"  that  they  "will  not  harass 
themselves  by  going  to  Courts  of  Justice;  but  will  state 
to  each  other  what  is  in  dispute,  and  refer  that  to  arbi- 
trators; and  entering  into  such  a  covenant  they  must  be 
taken  to  mean,  that  they  will  be  content  with  a  decision 
upon  such  discovery  as  arbitrators  can  compel,  without 
subjecting  each  other  to  the  necessity  for  either  to  be 
examined  upon  oath,  before  arbitrators,  who  cannot  ex- 
amine them  upon  oath."^*  Accordingly,  he  says,  "they 
choose  therefore  that  forum  exclusive  of  the  jurisdiction 
of  the  country  to  all  intents  and  purposes;  meaning,  that 
arbitrators  shall  from  beginning  to  end  do  that,  which 
they  are  enabled  to  do,  viz.,  to  decide  between  them  as  well 
as  they  can."  ^^  And  if  they  break  their  agreement,  a  suit 
is  justified,  in  which,  it  is  true,  they  would  recover  onlj^ 
nominal  damages,  just  as  much  if  they  file  a  bill  for  dis- 
covery as  if  they  file  a  bill  for  discovery  and  relief.  Ac- 
cordingly, having  demolished  his  whole  argument  in  Half- 
hide  V.  Fenning,  he  then  says  that  it  is  not  surprising  "that 

"Vesey  Jr.  814,  at  p.   819. 
"  Italics  ours. 


164  COMMERCIAL  ARBITRATION' 

Lord  Kenyoh  should  take  it,  that  the  Counsel  (Lord  El- 
don)  thought,  if  not  upon  that,  it  (the  plea)  could  not 
be  supported."  "But,"  says  he,  "if  the  distinction  can- 
not be  maintained  between  a  bill  for  discovery  only  and 
for  both  discovery  and  relief,  it  must  be  said,  they  are 
bound  to  go  first  before  the  arbitrators;  and  the  party 
must  be  brought  there;  and  must  refer:  the  parties  to 
be  examined  upon  honour;  for  they  cannot  upon  oath. "^® 
It  is  true  this  situation  does  not  quite  appeal  to  the  Lord 
Chancellor's  sense  of  equity,  for  if  the  parties  are  always 
to  wait  until  after  an  award  before  appljang  to  equity 
for  relief,  he  observes  that  they  may  lose  all  opportunity 
for  relief,  and  if  they  apply  for  relief  ancillary  to  the 
arbitration,  he  recalls  "passages,  in  which  Courts  of  Jus- 
tice, however  full  of  eulogia  upon  these  domestic  forums, 
have  recollected  their  own  dignity  sufficiently  to  say,  they 
would  not  be  ancillary  to  those  forums."  And  so  he  says: 
"I  do  not  enter  into  the  question  of  the  effect  at  law  of 
a  covenant  to  forbear  to  sue."  Of  course  not;  a  release 
is  such  a  covenant.  At  law  it  was  a  full  bar.  But  equity, 
upon  familiar  grounds,  could  relieve  the  parties.  "But, 
supposing  it  good,  in  strict  law  it  cannot  be  maintained, 
that  having  covenanted  to  refer  the  party  has  covenanted 
to  forbear  to  sue ;  and  if  not,  he  has  only  left  himself  open 
to  an  action  for  damages,  if  he  does  not  refer;  which  the 
suit  does  not  prevent,  if  thought  advisable. ' '  ^^  And  now 
comes  the  clear  explanation  for  the  point  of  view  of  a 
great  Equity  Judge:  "It  would  be  very  strong  to  say, 
that,  where  the  legal  remedy  they  have  provided  for  them- 
selves is  utterly  incompetent  to  justice,  this  Court  is  pre- 
cluded from  granting  its  ordinary  remedy,  by  a  covenant, 
which  does  not  in  terms  express  an  undertaking  not  to 
resort  to  this  Court:  and  must  hold  that  doctrine  upon 
a  plea;  in  that  shape  permitting  the  Defendant  to  have 
in  substance  a  specific  performance,  which  would  have 

»6  Vesey  Jr.  814,  at  p.  820. 


"OUSTING  THE  COURTS  OF  JURISDICTION"  165 

been  refused  to  him  as  a  Plaintiff."  "  In  other  words,  it 
is  the  chief  business  of  equity  to  relieve  parties  from  situa- 
tions in  which  they  find  themselves  helpless  at  law.  Where 
a  deed,  a  release,  or  a  contract  has  been  secured  by  fraud, 
by  mistake,  by  taking  undue  advantage  of  one  of  the  par- 
ties, equity  is  swift  to  the  rescue;  why  not  in  the  case  of 
such  covenants  as  these  ?  The  initial  error  arises  from  the 
failure  to  follow  the  decision  of  Jeffreys,  to  which  no  one 
calls  attention  in  the  days  of  Loughborough,  Hardwicke, 
Kenyon  and  Eldon ;  and  the  refusal  to  aid  in  the  enforce- 
ment of  agreements  to  arbitrate.  It  was  not,  as  at  first 
the  judges  feared,  impracticable.  Five  years  later  Lord 
Eldon  did  this  very  thing.^^  Then  he  was  restrained  by 
no  fear  that  sustaining  the  plea  gave  the  defendant  relief 
which  he  could  not  secure  in  an  action  for  specific  per- 
formance.-^ 

In  Street  v.  Righy,  as  in  Mitchell  v.  Harris,  Lord  Eldon 
insists  upon  the  jurisdiction  of  equity  to  protect  the  par- 
ties even  against  their  own  covenant,  just  as  in  Waters  v. 
Taylor,  he  enforces  their  covenant  for  them.  He  says  in 
Street  v.  Bighy  ''that  no  instance  is  to  be  found  of  a 
decree  for  specific  performance  of  an  agreement  to  name 
arbitrators ;  or  that  any  discussion  upon  it  has  taken  place 
in  experience  for  the  last  twenty-five  years. ' '  ^**  But  we 
submit  that  the  search  for  precedents  was  not  complete, 
and  that  in  any  event,  five  years  later,  in  Waters  v.  Taylor, 
the  Chancellor  himself  made  such  a  precedent.  In  equity, 
he  compelled  the  parties  to  carry  out  their  agreement  to 
arbitrate. 

From  all  of  which  we  may  now  conclude  that  the  Chan- 
cellors of  these  days  had  no  intention  of  avoiding  the  legal 

^  Ibid.,  p.  821,     Italics  ours. 

*«  Waters  v.  Taylor,  15  A^es.  Jr.  10. 

**  And  under  the  spur  of  Parliament,  the  courts  in  1892  do  find 
a  way  to  enforce  specific  performance  of  such  agreements.  See 
post,  pp.   212-213. 

»°6  Ves.  Jr.  814,  at  p.  817. 


166  COMMERCIAL  ARBITRATION 

effect  of  agreements  to  arbitrate — they  were  concerned  only 
with  the  problems  of  equitable  relief  in  such  cases.^^ 

Lord  Kenyon  in  Thompson  v.  Charnock,^^  in  1799,  does 
himself  a  grave  injustice  by  saying:  "It  is  not  necessary 
now  to  say  how  this  point  ought  to  be  determined  if  it 
were  res  integra,  it  having  been  decided  again  and  again 
that  an  agreement  to  refer  all  matters  in  difference  to 
arbitration  is  not  sufficient  to  oust  the  Courts  of  Law  or 
Equity  of  their  jurisdiction."  But  a  still  greater  injustice 
was  done  to  Lord  Kenyon  in  assuming  in  Thompson  v. 
Charnock  he  had  reversed  his  decision  in  Half  hide  v.  Fen- 
ning.^^ 

Later  than  Thompson  v.  Charnock  (1799),  Mitchell  v. 
Harris  (1793),  Street  v.  Bigly  (1802)  and  Waters  v.  Tay- 

^^  The  English  judges  and  the  Scotch  judges  were  not  in  accord 
upon  this  subject.  See  discussion  by  Bell,  Law  of  Arbitration  (2nd 
Ed.),  pp.  24,  267,  268,  and  discussion  by  Lord  Moncreiff  in  BraMnrig 
r.  Menzies,  4  Sess.  Cases,  2nd  Series,  274,  at  p.  282  et  seq., 
also  remarks  by  Lord  Campbell  in  Mackenzie  v.  Girvan,  2  Bell's 
App.  43,  at  p.  55,  wherein  his  Lordship  said  that  to  him  it  seemed 
' '  the  practice  of  Scotland  is  much  more  convenient  than  the  prac- 
tice here"  and  that  the  English  practice  "has  produced  very  great 
inconvenience."  The  Scotch  rule  was,  as  stated  by  Moncreiff  in 
Brakinrig  v.  Menzies  (p.  283)  : 

* '  All  the  authorities  agree  that  a  submission  to  arbiters  is  a 
contract  by  which  the  parties  commit  to  the  entire  and  exclusive 
cognizance  of  the  arbiter  or  arbiters  named  the  whole  matter  sub- 
mitted, and  bind  themselves  to  abide  by  his  or  their  decision  in  all 
things."  And  this  comprehended  "the  decision  in  law  as  well  as 
in  fact." 

This  rule  Lord  Campbell  regarded  as  a  "much  more  reasonable" 
rule  than  the  practice  in  England,  whereby  if  it  appears  upon  the 
face  of  the  award,  or  in  the  papers  referred  to  in  the  award,  that 
the  arbitrator  has  mistaken  the  law,  the  Court  had  jurisdiction  over 
the  award  and  will  set  it  aside. 

"That  has  produced  so  much  inconvenience  in  this  country," 
said  Lord  Campbell,  "that  for  a  number  of  years  past  in  West- 
minster Hall,  they  have  said  that  they  would  not  at  all  review  what 
the  arbitrator  had  done,  if  it  was  referred  to  a  barrister-at-law — a 
gentleman  in  the  law;  but  that  whatever  he  decided,  whether  right 
or  wrong,  should  be  final  between  the  parties."  (Mackenzie  v. 
Girvan,  supra,  at  p.  55.) 

"8  T.  E.  139,  at  p.  140. 

"See  Lord  Chancellor  Sugden's  remark  in  Dimsdale  v.  Bobcrtson 
(1844)  2  Jones  &  La  Touche's  Reports  58,  post. 


"OUSTING  THE  COURTS  OF  JURISDICTION"  167 

lor  (1807-8)  appears  Ilarcourt  v.  Ramshottmn.^*  This  case 
comes  before  Lord  Eldon  in  1820.  It  will  bear  careful 
study. 

Here  were  articles  of  arbitration  between  bankers.  A 
suit  had  been  brought  and  a  receiver  appointed.  Both 
parties  then  agreed  to  arbitrate  and  the  agreement  pro- 
vided for  the  manner  of  appointing  the  arbitrators.  The 
appointment  of  the  arbitrators  was  confirmed  by  order  of 
the  court.  Thereafter  the  plaintiff  revoked  the  submission, 
but  the  arbitrator  went  on  and  made  the  award.  Then 
the  plaintiff  brought  a  bill  in  equity  to  set  aside  the 
award.  And  his  counsel  contended  that  "The  authority 
of  an  arbitrator  is  always  revocaile  till  the  award  is  made ; 
and  if  one  party  revokes  it,  the  only  remedy  of  the  other 
is  by  an  action  on  the  bond  or  covenant. ' '  ^^  He,  too, 
relies  upon  King  v.  Joseph,^^  and  Milne  v.  Gratrix,^''  which, 
it  will  be  recalled,  are  direct  descendants  of  Coke's  dictum 
in  Vynior's  Case.^^  To  all  of  which  Lord  Eldon  replies: 
"It  is  said,  the  award  is  not  good  because  the  authority 
was  revoked :  my  answer  is,  that  if  it  is  revoked  at  law,  I 
could  not  have  considered  if  as  revoked  in  equity,  whether 
it  was  made  a  rule  of  Court  or  not."^^  He  says  to  the 
plaintiff:  "If  the  award  was  not  enforced,  this  Court 
would  leave  the  parties  to  deal  with  the  matter  at  law; 
and  if  at  law  you  can  restrain  them  from  selling  these 
estates,  do  it;  hut  you  have  no  equity  to  come  here."^^ 

And  even  as  to  the  rule  at  law  he  is  not  quite  certain, 
for  he  says:  "I  am  not  saying  it  (the  revocation)  is  good 
at  law,  but  I  agree  entirely  that  it  is  had  in  equity,  under 

*•  1  Jacob  &  Walker's  Chancery  Eeports  505  (First  American,  from 
the  first  London  edition). 

^'  Ibid.,  p.  507.    Italics  ours. 

'"5  Taunt.  452. 

"7  East  608. 

**See  supra,  p.  157. 

^1  Jacob  &  Walker's  Chancery  Reports  505,  at  p.  511.  Italics 
ours. 


168  COMMERCIAL  ARBITRATION 

these  circumstances."  ^'^  So,  whatever  its  effect  at  law,  this 
great  judge  treats  the  revocation  of  a  submission,  except 
where  equitable  grounds  for  it  are  proved,  as  bad  in  equity. 
And  he  will  not  permit  the  parties  to  argue  that  the 
award  is  ineffective.  "Because  one  party  says  it  is  re- 
voked, then,  although  it  is  matter  of  justice  to  the  other 
party,  yet  the  arbitrator  is  not  to  hear  him  on  the  other 
parts  of  his  case;  but  is  to  say  at  once,  this  party  will 
not  let  me  go  on.  .  .  .  It  is  impossible  to  maintain  that."  ^^ 

Thus  Milne  v.  Gratrix  (1806),  King  v.  Joseph  (1814), 
Aston  V.  George  (1819)  and  Hide  v.  Petit  (1670)  are  set 
aside.  Yet  this  later  case  (1820)  is  treated  by  the  re- 
porters of  the  day  as  hardly  deserving  of  more  than  pass- 
ing notice  and,  as  we  shall  see,  is  rarely,  if  ever,  referred 
to  in  later  argument. 

In  Chancery,  in  Lord  Eldon's  day  (1823),  where  it  is 
one  of  the  terms  of  an  agreement  to  refer  disputes  to  ar- 
bitration that  the  submission  shall  be  made  a  Rule  of 
Court  of  Common  Pleas  if  either  party  require  it,  the  Court 
refuses  to  relieve  a  party  from  an  award  even  though  the 
submission  has  not  been  made  a  rule  of  the  Court  of  Com- 
mon Pleas  within  the  statutory  period.  The  Vice-Chancellor 
(Sir  John  Leach)  says:  "I  cannot  consider  that  it  was  the 
intention  of  the  Legislature  to  leave  it  to  a  party  who  meant 
to  complain  of  the  award  to  escape,  at  his  pleasure,  from 
the  provisions  of  the  statute." 

In  1838,  the  Vice-Chancellor  (Lord  Shad  well)  in  Pope 
V.  Lord  Duncannon*^  refused  to  restrain  the  defendants 
from  acting  upon  an  award  where  the  plaintiff  had  revoked 
the  submission  before  the  arbitrators  had  made  an  award. 
The  Vice-Chancellor  expressly  adopts  Lord  Eldon's  reason- 
ing in  Harcourt  v.  Eamsiottom.    "1  say,"  said  he,  "that  a 

*!  Jacob  &  Walker's  Chancery  Keporta  505,  at  p.  612.  Italica 
ours. 

*^Ibid.     Italics  ours. 

"9  Sim.  177,  at  p.  179,  180.    Italics  ours. 


"OUSTING  THE  COURTS  OF  JURISDICTION"  169 

Plaintiff  is  not  at  liberty  to  ask  the  aid  of  a  Court  of 
Equity  in  respect  of  an  act  done  by  him  against  good 
faith"  and  ^s  there  was  nothing  to  show  that  the  revoca- 
tion was  based  upon  "any  just  or  reasonable  grounds,"  in 
other  words,  "matter  of  equity,"  "I  am  bound  to  con- 
clude that  the  revocation  was  a  wanton  and  capricious  ex- 
ercise of  authority.  ..." 

We  now  come,  in  1844,  to  Dimsdale  v.  Robertson,*^  where 
Lord  Chancellor  Sugden  follows  and  adopts  Lord  Eldon's 
statements  in  Waters  v.  Taylor,  wherein  he  says,  by  their 
agreement  "the  parties  .  .  .  anxiously  provided  for  the 
reference  to  arbitration  ..."  and  "Lord  Eldon  there, 
upon  an  interlocutory  application,  drove  the  parties  to  a 
reference."  *^  After  reviewing  all  the  cases — including 
Mitchell  V.  Harris,  Wellington  v.  Mackintosh,  Thompson  v. 
Charnock  and  Street  v.  Bighy,  the  Lord  Chancellor  says: 

"Upon  the  whole,  therefore,  I  think  that  Half  hide  v. 
Fenning  is  still  law."  *^ 

He  says  that  Lord  Kenyon  in  Thompson  v.  Charnock  was 
misunderstood.  "I  am  not  aware,"  says  he,  "of  any  case 
in  which  Lord  Kenyon  doubted  bis  ovsoi  decision  [Half hide 
V.  Fenning]."  "There  is  no  report  of  any  decision  of 
Lord  Thurlow's  impeaching  Lord  Kenyon's.  "^®  Accord- 
ingly, the  Chancellor  refuses  to  aid  the  plaintiff  in  with- 
drawing a  case  from  arbitration. 

**  2  Jones  &  La  Touche  's  Eeports  58. 
**  Ibid.,  p.  93.     Italics  ours. 
*'Ibid.,  p.  92.    Italics  ouri. 
''Ibid.,  p.  92. 


CHAPTER  XIV 

THE  ERROR  IS  CORRECTED:  SCOTT  V.  AVERY  (1855) 

We  may  now  proceed  directly  to  the  consideration  of 
Scott  V.  Avery,^  decided  in  1855  in  the  House  of  Lords, 
where,  after  much  dehate,  the  rule  of  Vynior's  Case  and 
Kill  V.  Hollister  is  reversed.  Here  it  is  held  that  parties 
may  covenant  "that  no  right  of  action  shall  accrue  till  a 
third  person  has  decided  on  any  difference  that  may  arise 
between  himself  and  the  other  party  to  the  covenant." 
Atherton  and  Pollock  argue  that  this  agreement  "is  in  it- 
self illegal,  as  ousting  the  jurisdiction  of  the  courts  of  law" 
and  cite  Kill  v.  Hollister,  Wellington  v.  Mackintosh,  Thomp- 
son V.  Charnock,  Street  v.  Eighy  and  Waters  v.  Taylor. 

The  judges  consider  all  these  authorities,  as  well  as 
Halfhide  v.  Penning  and  Dimsdale  v.  Roiertson.  Baron 
Martin  and  Lord  Coleridge  are  for  the  rule  stated  in 
Thompson  v.  Charnock  and  Kill  v.  Hollister.  Lord  Chan- 
cellor Cranworth  and  Lord  Campbell  are  for  the  broader 
rule  in  Halfhide  v.  Penning  and  Waters  v.  Taylor.  Baron 
Martin  says: 

"The  true  ground  I  believe  to  be,  that  a  prospective 
agreement  not  to  have  recourse  to  the  courts  of  law  or 
equity  of  the  country  in  respect  of  future  causes  of  action 
to  arise,  is  against  the  liberty  of  the  law,  which  secures  to 
every  one  the  right  of  submitting  to  the  courts  any  matters 
in  respect  of  which  he  claims  redress."^ 

But  it  is  not  the  liberty  of  the  individual  to  resort  to 
the  courts  in  spite  of  his  agreement  to  the  contrary,  for 

'5  H.  L.  C.  811;  25  L.  J.  (Exch.)  308. 
*JMd.,  p.  830. 

170 


SCOTT  V.  AVERY  171 

the  courts  will  decline  to  lend  him  their  aid  if  he  has 
waived  his  rights  or  in  good  faith  released  the  other  party 
from  all  claims  against  him.  ]\Ir.  Justice  Crompton  says 
very  logically,  it  seems  to  us,  that  "the  proceeding  to  be 
gone  through  under  the  agreement  in  question  was  an 
arbitration  of  a  strictly  judicial  nature,  in  which  the 
arbitrators  were  to  proceed  judicially."^  Accordingly, 
he  finds  that  this  covenant  does,  in  fact  "oust  the  court 
of  jurisdiction,"  But  he  says  that  "It  is  a  legal  incident 
to  every  contract  that  the  parties  should  have  a  right  to 
resort  to  a  court  of  law  for  the  settlement  of  their  dis- 
putes; and  a  stipulation  to  the  contrary  is  void,  as  be- 
ing repugnant  to  the  rest  of  the  contract."* 

Contrary  to  the  decisions  of  Lord  Eldon,  Lord  Sugden 
and  Lord  Kenyon,  the  rule  is  now  re-dressed  and  put 
forth  by  Baron  Martin  and  Lord  Coleridge  as  a  rule  of 
public  policy.  Now  it  is  no  longer  a  matter  merely  of 
appropriate  relief,  but  such  provisions  are  absolutely  void. 
Of  course,  if  they  are  void,  they  are  revocable — thus  once 
more  Lord  Coke's  dictum  comes  to  reign  over  England. 

But  here  we  are  referred  to  a  new  source  of  authority — 
again  from  Coke.  Baron  Parke,  in  the  Court  of  Ex- 
chequer, had  quoted  a  passage  from  Coke  Littleton :  *  "If 
a  man  make  a  lease  for  life,  and  by  deed  grant  that  if  any 
waste  or  destruction  be  done  that  it  shall  be  redressed  by 
neighbours  and  not  by  suit  or  plea — notwithstanding,  an 
action  of  waste  shall  lie,  for  the  place  wasted  cannot  be 
recovered  without  a  plea. ' '  But ' '  The  case, ' '  says  Mr.  Jus- 
tice Cresswell  in  the  House  of  Lords,^  "is  not  to  be  found 
in  the  Year  Book,  3  Ediv.  3,  referred  to,  but  is  in  Fitz- 
heriert's  Abridgment,  'Waste!,'  Placitum  5,  and  the  whole 
of  it  is  given  in  Coke  Littleton."    The  learned  Baron  had 

'Ibid.,  p.  834. 

*Ibid.,  p.  835. 

•8  Exch.  Rep.  494. 

•5  H.  L.  C.  811,  at  p.  837. 


172  COMMERCIAL  ARBITRATION 

not  consulted  Statham  or  Bracton,  nor  found  the  cases 
we  have  cited  from  Fitzherbert,  nor  referred  to  the  cases 
in  Bracton 's  Note  Book.  Moreover,  as  Mr.  Justice  Cress- 
well  very  properly  observed  in  criticism  of  Baron  Parke's 
reference: — "It  seems  that  this  decision  proceeded  on  the 
ground  that  the  neighbours  could  not  redress  the  wrong 
done;  that  it  could  only  be  done  by  plea;  therefore,  not- 
withstanding the  deed,  an  action  of  waste  would  lie. 
There  is  not  a  word  leading  to  the  supposition  that  an 
action  would  have  been  maintainable,  if  neighbours  could 
have  given  the  appropriate  redress;  or  that  it  might  not 
have  been  granted  by  deed,  that  if  a  dispute  arose  about 
waste,  neighbors  should  say  whether  there  had  been  waste 
or  not.''''  Yet  without  further  examination  or  considera- 
tion of  other  and  older  precedents,  this  quotation  from 
Coke  was  "considered  to  have  established  that  parties 
cannot  by  agreement  oust  the  jurisdiction  of  the  Courts  of 
the  realm." 

Upon  this  basis,  the  plaintiff  had  been  permitted  to 
recover  in  the  Court  of  Exchequer,  which  at  that  time 
consisted  of  Barons  Parke,  Alderson,  Piatt,  and  Martin.^ 
On  appeal,  however,  the  Court  of  Exchequer  Chamber  re- 
versed the  judgment,  though  Coleridge,  J.,  conceded  ^  "that 
any  agreement  which  is  to  prevent  the  suffering  party  from 
coming  into  a  Court  of  law,  or,  in  other  words,  which  ousts 
the  Courts  of  their  jurisdiction,  cannot  be  supported." 
Upon  appeal  to  the  House  of  Lords,  the  defendant's  plea 
is  sustained,  the  agreement  to  arbitrate  is  held  to  bar  the 
suit  in  equity,  the  plaintiff  is  not  permitted  to  revoke. — In 
short,  the  doctrine  of  Halfhide  v.  Fenning,  Waters  v.  Tay- 
lor and  Harcourt  v.  Bamsbottom  prevails. 

Mr.  Justice  Coleridge  says,  however:  "The  principle  of 

'5  H.  L.  C.  811,  at  p.  837.    Italics  ours. 
*8  Exch.  Rep.  487. 
*Ihid.,  p.  500. 


SCOTT  V.  AVERY  17& 

law  whieli  is  relied  on  by  the  Plaintiff  in  Error  is  agreed 
on.  The  difference  between  the  parties  is  upon  the  ques- 
tion whether  it  governs  the  present  case.  ...  If  two  par- 
ties enter  into  a  contract,  for  the  breach  of  which  in  any 
particular  an  action  lies,  they  cannot  make  it  a  binding 
term,  that  in  such  event  no  action  shall  be  maintainable, 
but  that  the  ordy  remedy  shall  be  by  reference  to  arbitra- 
tion. Whether  this  rests  on  a  satisfactory  principle  or 
not  may  well  he  questioned;  hut  it  has  heen  so  long  settled, 
that  it  cannot  he  disturhed."  ^"  A  more  thorough  examina- 
tion of  the  earlier  cases  would  have  convinced  the  learned 
judge  that  no  such  proposition  had  been  settled  and  that, 
indeed,  there  was  good  reason  why  it  should  have  been 
questioned. 

Again,  Lord  Coleridge  says:  "The  courts  will  not  en- 
force or  sanction  an  agreement  which  deprives  the  sub- 
ject of  that  recourse  to  their  jurisdiction,  which  has  been 
considered  a  right  inalienable  even  by  the  concurrent  will 
of  the  parties."  But  agreements  to  submit  differences 
to  arbitration  are  not  intended  to  deprive  the  subject  of 
recourse  to  the  jurisdiction  of  the  courts.  Indeed,  the  rem- 
edy for  enforcement  of  an  award  is  to  sue  in  the  courts 
upon  the  award,  or,  if  a  bond  is  given,  to  sue  on  the  bond. 
All  the  arbitrators  do  is  to  determine  what  is  owing  from 
one  party  to  the  other.  This  does  not  make  the  arbitration 
imenforcible  in  courts  of  law  or  equity — ^save  as  the 
courts  themselves  have  made  it  so ;  nor  -where  matter  of 
equity  is  involved,  does  it  preclude  recourse  to  equity. 
What  the  party  seeks  in  the  arbitration  is  a  determination 
of  what  is  due,  by  the  cheapest  and  most  expeditious  proc- 
ess. This  surely  is  not  against  public  policy.  And  an 
agreement  determining  the  process  or  selecting  the  ma- 
chinery is  like  any  other  kind  of  agreement,  one  that  the 
courts  should  enforce,  unless  it  be  against  public  policy  *- 

"5  H.  L.  C.  811,  at  p.  841.    Italics  ours. 


174  COMMERCIAL  ARBITRATION 

just  as  Lord  Eldon  did  enforce  it  in  Waters  v.  Taylor  and 
in  Harcourt  v.  Eatnshottam. 

Mr.  Justice  Coleridge  practically  concedes  this  when  he 
says: 

"But  nothing  prevents  parties  from  ascertaining  and 
constituting  as  they  please  the  cause  of  action  which  is  to 
become  the  subject-matter  of  decision  by  the  courts.  Cove- 
nanting parties  may  agree  that  in  case  of  an  alleged  breach 
the  damages  to  be  recovered  shall  be  a  sum  fixed,  or  a  sum 
to  be  ascertained  by  A.  B.,  or  by  arbitrators  to  be  chosen 
in  such  or  such  a  manner ;  and  until  this  be  done,  or  the 
non-feasance  be  satisfactorily  accounted  for,  that  no  action 
shall  be  maintainable  for  the  breach. "^^  And  "This  po- 
sition," he  says,  "has  not  been  questioned  in  the  argu- 
ment before  the  House;  nor  was  it,  I  think,  in  the  Court 
below. "^'  In  this,  he  was  in  error;  for  the  plaintiff's 
counsel  argued  and  argued  logically — so  we  believe — and 
Baron  Parke  and  his  colleagues  agreed  with  him,  that  to 
leave  arbitrators  to  determine  what  is  due  from  A  to  B 
is  to  permit  them  to  determine  the  entire  controversy,  and 
this,  in  a  very  practical  sense,  ousts  the  court  of  jurisdic- 
tion. IMy  Lord  Coleridge  was  not  satisfied  that  arbitra- 
tion agreements  should  not  be  upheld,  but  he  felt  con- 
strained, for  want,  shall  we  say,  of  better  guidance,  to 
treat  the  law  as  so  settled.  But  he  whittled  it  to  the  vanish- 
ing point;  for  every  covenant  to  submit  to  arbitration  is 
in  truth  and  in  fact  a  covenant  not  to  resort  to  the  courts 
to  enforce  one's  rights  until  arbitrators  have  determined 
those  rights. 

And  so  Mr.  Justice  Coleridge  is  forced  to  conclude :  "It 
is  true  that  in  arriving  at  the  sum  to  be  sued  for,  the  com- 
mittee, or  the  arbitrators,  may  have  to  consider  the  na- 
ture of  the  claim,  and  the  proofs  of  it ;  but,  so  in  settling 

"5  H.  L.  C.  811,  at  p.  841.     Italics  ours. 

"But  see  his  observations  thirty-six  years  later  (1892)  in  Trainor 
V.  -Phoenix  Fire  Assurance  Co.,  G5  L.  T,  825  (post,  pp.  210-211). 


SCOTT  V.  AVERY  175 

the  amount  to  be  recovered  by  a  builder  or  a  railway  con- 
tractor, the  architect  or  engineer,  or  whoever  may  be  the 
preliminary  referee  agreed  on  for  the  purpose,  must  ex- 
amine and  decide  that  which  may  really  he  the  very  point 
in  dispute  between  the  parties,  namely,  the  quantity  or  the 
goodness  of  the  work,  or  the  quality  of  materials  used;  yet 
no  one  objects  that  on  this  account  the  stipulation  for 
submission  to  this  previous  inquiry  is  void  as  ousting  the 
Jurisdiction  of  the  courts."  ^^     And  why  is  the  learned 
Justice  so  keen  to  draw  this  nice  distinction  ?    He  tells  us : 
'*/  certainly  am  not  disposed  to  extend  the  operation  of 
a  rule  which  appears  to  me  to  have  been  founded  on  very 
narrow  grounds,  directly  contrary  to  the  spirit  of  later 
times,  which  leaves  parties  at  full  liberty  to  refer  their  dis- 
putes at  pleasure  to  p^^blic  or  private  tribunals."  '^^    The 
spirit  of  1856  was  disposed  to  leave  "parties  at  full  liberty 
to  refer  their  disputes  at  pleasure  to  public  or  private  tri- 
bunals."   But  what  becomes  of  the  doctrine  of  revocability 
of  a  submission  or  agreement  to  arbitrate,  or  of  its  being 
void  as  against  public  policy?    True  it  is,  that  after  Scott 
V.  Avery,  and  down  to  1892,  English  courts  attempted  to 
apply  the  subtle  distinction  of  Mr.  Justice  Coleridge  be- 
tween "access  to  the  courts  of  law"  and  "a  condition  pre- 
cedent to  appeal  to  them" — but  all  that  was  ever  neces- 
sary in  order  to  apply  the  true  doctrine  was  to  follow  Lord 
Eldon,  in  Waters  v.  Taylor,  and  Lord  Kenyon  in  Half- 
hide  V.  Fenning,  and  Lord  Sugden  in  Dimsdale  v.  Robert- 
son,— and,  with  reverence  for  their  antiquity,  the  judges 
of  Bracton's  time — to  treat  the  covenant  to  arbitrate  as  a 
plea  in  bar,  but  to  leave  the  parties  free  to  seek  relief  from 
the  awHvrd  in  accordance  with  principles  of  Equity. 

In  truth,  an  agreement  to  arbitrate  is  a  release,  con- 
ditioned upon  the  determination  of  an  event  subsequent. 

Lord  Chancellor  Cranworth  in  the  prevailing  opinion, 
in  the  House  of  Lords,  asserts  that  the  general  policy  of 
*"  5  H,  L.  C.  811,  at  p.  843.    Italics  ours. 


"/76  COMMERCIAL  ARBITRATION 

the  law  is  ' '  that  parties  cannot  enter  into  a  contract  which 
gives  rise  to  a  right  of  action  for  the  breach  of  it,  and 
then  withdraw  such  a  case  from  the  jurisdiction  of  the 
ordinary  tribunals.  But  surely,"  he  continues,  "there 
can  be  no  principle  or  policy  of  the  law  which  prevents 
parties  from  entering  into  such  a  contract  as  that  no  breach 
shall  occur  until  after  a  reference  has  teen  made  to  ar- 
iitration."  ^*  He  finds  that  "the  meaning  of  the  parties" 
in  the  case  at  bar  was  "that  the  sum  to  be  recovered  should 
be  only  such  a  sum  as,  if  not  agreed  upon  in  the  first  in- 
stance between  the  committee  and  the  suffering  member, 
should  be  decided  by  arbitration,  and  that  the  sum  so 
ascertained  by  arbitration,  and  no  other,  should  be  the 
sum  to  be  recovered."  ^^  "And,"  remarks  he,  "if  that  was 
their  meaning,  the  circumstance  that  they  have  not  stated 
that  meaning  in  the  clearest  terms,  or  in  the  most  artistic 
form,  is  a  matter  utterly  unimportant."^^ 

Now  we  contend  that  this  is  the  intendment  of  the  par- 
ties in  every  arbitration  clause.  There  is  to  be  no  "oust- 
ing the  courts  of  jurisdiction"  to  grant  relief,  equitable  or 
otherwise,  but  there  is  to  he  a  determination  of  what  is 
due  from,  one  to  the  other. 

My  Lord  Campbell  found  the  contract  in  Scott  v.  Avery 
"as  clear  as  the  English  language  could  make  it,  that  no 
action  should  be  brought  against  the  insurers  until  the 
arbitrators  had  disposed  of  any  dispute  that  might  arise 
between  them,"^*  "That  being  the  intention  of  the  par- 
ties," he  asks,  "is  the  contract  illegal?"  He  finds  "an 
express  undertaking  that  no  action  shall  be  brought  until 
the  arbitrators  have  decided,  a7id  there  is  ahimdant  co-ii- 
sideration  for  that  in  the  mutual  contract  into  which  the 
parties  have  entered;  therefore,"  says  he,  "unless  there 
is  some  illegality  in  the  contract,  the  Courts  are  hound  to 

"5  H.  L.  C.  811,  at  p.  817.    Italics  ours. 
"Ihid.,  p.  849. 
"J6td.,  p.   851. 


SCOTT  V.  AVERY  177 

give  it  effect."  ^^  He  finds  "no  statute  against  such  a  con- 
tract"— "then,  on  what  ground  is  it  to  be  declared  il- 
legal?" he  asks.  "It  is  contended,"  he  says,  "that  it  is 
contrary  to  public  policy"  but  "that  is  rather  a  dangerous 
ground  to  go  upon"  and  upon  this  point  he  refers  the 
Lords  to  a  very  important  case  then  but  lately  decided ;  ^' 
"but  Avhat  pretence  can  there  be  for  saying  that  there  is 
anything  contrary  to  public  policy  in  allowing  parties  to 
contract,  that  they  shall  not  be  liable  to  any  action  until 
their  liability  has  been  ascertained  by  a  domestic  and  pri- 
vate tribunal,  upon  which  they  themselves  agree  ? "  ^' 

Now,  it  will  be  recalled  that  the  other  judges  had  said 
that  such  a  covenant  deprived  the  individual  of  his  liberty 
at  all  times  to  resort  to  the  courts.  But  Lord  Campbell 
says,  we  think  with  truth:  "It  seems  to  me  that  ii  would 
he  a  most  inexpedient  encroachment  upon  the  liberty  of 
the  subject  if  he  were  not  allowed  to  enter  into  such  a  con- 
tract. ...  Is  there  anything  contrary  to  public  policy  in 
saying  that  the  (Insurance)  Company  shall  not  be  harassed 
by  actions,  the  costs  of  which  might  be  ruinous,  but  that 
any  dispute  that  arises  shall  be  referred  to  a  domestic 
tribunal,  which  may  speedily  and  economically  determine 
the  dispute  ? "  ^^  So  it  seems  to  us.  Like  Lord  Campbell, 
we  do  not  see  "the  slightest  ill  consequences  that  can  flow 
from  such  an  agreement;"  on  the  contrary,  we  see  "great 
advantage  that  may  arise  from  it,"  and  say  with  him: 
"Public  policy,  therefore,  seems  .  .  .  to  require  that  ef- 
fect should  be  given  to  the  contract."  ^^ 

He  distinguishes  Thompson  v.  CharnocJc,  it  is  true,  be- 
cause in  that  case  there  was  simply  a  "clause  or  covenant 
to  refer  to  arbitration,"  which  went  no  further;  but  he 
finds  a  more  recent  precedent  in  point  in  the  case  of 

"Ibid.,  p.  852.     Italics  ours. 

"Egerton  v.  Brovynlow,  4  H.  L.  C.  1. 

"  5  H.  L.  C.  811,  at  p.  852,  853.     Italics  ours. 

^Ilid.,  p.  853.     Italics  ours. 


178  COMMERCIAL  ARBITRATION 

Brown  v.  Overbury,^'^  where,  as  a  condition  of  holding  a 
race,  any  dispute  was  to  be  referred  to  the  stewards.  In 
the  latter  case,  the  trial  judge  decided  and  was  upheld 
unanimously  by  the  Court  of  Exchequer,  that  * '  even  if  the 
horse  could  clearly  be  shown  to  have  won,  the  action  had 
not  accrued  till  the  arbitrators,  the  stewards,  had  deter- 
mined;^' ^^  and  so  there  the  plaintiff  was  non-suited.  It  is 
noteworthy  that  my  Lord  Campbell  could  not  distinguish 
these  two  cases  in  principle.  ' '  Substitute  stewards  for  arbi- 
trators," he  says,  "and  it  is  the  same  question,  whether 
it  is  a  contract  of  insurance,  or  a  contract  upon  a  horse- 
race, which  by  Act  of  Parliament  is  legal.  "^^  And  so 
Lord  Chancellor  Cranworth,  Lord  Campbell,  and  Lord 
Brougham  all  concur  in  Judgment  for  the  Defendant.'* 

Lord  Campbell's  views  were  most  favorable  to  arbitra- 
tion. In  Mackenzie  v.  Girvan  ^^  in  1843  he  had  lamented 
the  "inconvenient"  and  "expensive"  results  of  the  ad- 
ministration of  the  rule  in  England  as  compared  with  that 
of  Scotland.  He  thought  then  that  it  was  highly  desirable 
that  parties  should  be  left  free  to  "select  a  judge  on  whom 
they  place  confidence  as  to  his  legal  qualifications,  and  as 
to  his  capacity  to  decide  facts,"  and  that  in  so  doing 
"they  think  that  he  will  dispose  of  the  matter  more  satis- 
factorily than  the  regular  tribunals  of  the  country,  more 
economically  perhaps,  and  more  expeditiously, — and  that 
there  may  be  no  appeal  to  the  Inner  House,  or  to  the 
House  of  Lords,  they  therefore,"  says  he,  "select  him  as 
their  judge,  and  his  judgment  is  to  be  final."  As  we  have 
seen,  the  Scotch  judges  always  were  clear  "that  a  sub- 
mission to  arbiters  is  a  contract  by  which  the  parties 
commit  to  the  entire  and  exclusive  cognizance  of  the  arbiter 

«11  Exch.  Eep.  715. 

•'S  H.  L.  C.  811,  at  p.  855.    Italics  ours. 

"Ibid.,  p.  855. 

**  Scott  V.  Avery,  5  H.  L.  C.  811,  25  L.  J.  (Exch.)  308. 

» 2  Bell 's  App.  Cases  43,  at  p.  55. 


SCOTT  V.  AVERY  179 

or  arbiters  named  the  whole  matter  submitted,  and  bind 
themselves  to  abide  by  his  or  their  decision  in  all  things" 
— and  this  comprehended,  to  their  mind,  "the  decision  in 
law  as  well  as  in  fact. "  -® 

^Per  Moncreiff,  Lord,  in  Brakinrig  v.  Memies   (H.  L.)   4  Sess. 
Cases,  2nd  Series,  274,  at  p.  283.     Italics  ours. 


CHAPTER  XV 

THE   TRUE  INTEEPEETATION  OF  SCOTT  V.  AVERY    (1855 

TO  1894) 

LoKD  Chancellor  Cranworth,  who  presided  at  the  trial  of 
Scott  V.  Avery  in  the  House  of  Lords,  and  who,  as  Lord 
Coleridge  later  said,  "was  no  mean  authority,"^  presided 
the  same  year  in  the  House  of  Lords  in  Drew  v.  Drew,^  de- 
cided shortly  prior  to  Scoit  v.  Avery.  He  then  stated  his 
understanding  of  the  law  of  England  clearly  and  forcibly. 
His  Lordship  observed  that,  prior  to  3  and  4  William  IV, 
c.  42,  "if  parties  submitted  a  matter  for  arbitration  to  a 
private  tribunal  to  be  decided  by  a  selected  person,  either 
of  them  might  at  any  time,  without  assigning  any  ground, 
revoke  that  Submission.  That  was  an  inconvenient,  and, 
I  think  I  may  he  allowed  to  say,  an  irrational  state  of  the 
law,"  said  he.  .  .  .  "7  say  that  was  an  absurd  state  of  the 
law,  which  has  since  heen  rectified,  and  now  the  law  may 
he  represented  as  heing  that  neither  party  to  a  suhmission 
can  stop  an  arhitration  pending  its  proceedings  without 
first  ohtaining  the  sanction  of  some  Court  of  Westminster 
Hall,  or  of  one  of  the  Judges,  for  so  doing."  ^ 

In  the  same  year  (1855)  in  Northampton  Gas-Light 
Company  v.  Parnell,*  (Common  Pleas)  Hilary  Term, 
Maule,  J.,  says:  "The  old  rule  upon  which  it  was  held  that 
the  power  of  an  arbitrator  was  revocable,  was,  that  a  power 
not  coupled  with  an  interest,  was  revocable, — revocable  by 
the  authority  which  created  it.    From  that  rule  it  was  in- 

*See  post,  p.  211. 

'Drew  V.  Brew,  2  Macq.  Reports  (H.  of  L.)  1,  March,  1855. 

*  Hid.,  pp.   3,  4.     Italics  ours. 

*  15  Common  Bench  Reports  630. 

180 


INTERPRETATION  OF  SCOTT  V.  AVERY     181 

ferred — erroneously,  as  I  think — that  one  of  the  parties 
to  a  submission  might  revoke  without  the  other.  It  seems 
to  me  that  that  was  allowing  one  man  to  affect  the  interest 
of  another.  But  it  was  an  inveterate  error.'' ^  This  rea- 
soning was  followed  not  only  in  the  House  of  Lords  and 
at  Common  Pleas,  but  in  Queen's  Bench,  in  the  Court  of 
Exchequer,  and  in  other  courts  in  England. 

In  1856,  in  Queen's  Bench,  in  Russell  v.  Pellegrini,^  it 
appeared  that  a  charter  party  for  a  ship  provided  that 
"Should  any  difference  of  opinion  arise  between  the  par- 
ties to  this  contract,  either  in  principle  or  detail,  the  same" 
should  be  referred  to  arbitration.  The  charterer  claimed 
from  the  ship  owner  damages  for  an  alleged  breach  of  an 
implied  warrant  of  seaworthiness  and  sought  to  secure  a 
reference.  The  ship  owner  refused.  Then  the  charterer 
commenced  an  action.  The  monthly  hire  coming  due  in 
the  meantime,  the  ship  owner  sued.  The  Court  stays  the 
ship  owner's  suit,  being  satisfied  that  the  charterer  "had 
always  been  desirous  to  refer  all  matters." 

The  clause  itself  is  important.  ''Should  any  difference 
of  opinion  arise  between  the  parties  to  this  contract,  either 
in  principle  or  detail,  the  same  shall  he  referred  for  ar- 
bitration to  two  persons,  one  to  he  chosen  by  each  con- 
tracting party,  with  power  to  call  in  a  third  person  as 
referee,  the  decision  of  a  majority  of  whom  shall  he  final 
and  binding."  It  will  be  observed  that  there  are  no  words 
as  to  "  condition  precedent  to  suit, ' '  etc.  The  clause  is  the 
plain  "general  arbitration"  clause.  It  is  Lord  Campbell 
who  speaks:  ''Somehow  the  Courts  of  law  had  in  former 
times  acquired  a  horror  of  arbitration;  and  it  was  even 
doubted  if  a  clause  for  a  general  reference  of  prospective 
disputes  was  legal.  I  never  could  imagine  for  what  rea- 
son parties  should  not  be  permitted  to  bind  themselves  to 
settle  their  disputes  in  any  manner  on  which  they  agreed. 

^  Ibid.,  p.  645.     Italics  ours. 
» 6  Ellis  &  Blackburn  1020. 


182  COMMERCIAL  ARBITRATION 

The  decision  in  Scott  v.  Avery,  that  an  agreement  that 
there  should  be  a  refer eyice  before  the  party  should  he  at 
liberty  to  sue  might  be  so  made  as  to  be  binding,  was  a 
very  wholesome  decision."  "^  Again:  "I  think  that  both 
the  demand  for  the  monthly  hire,  and  the  cross  claim  for 
damages,  arose  out  of  the  contract,  and  are  matters  re- 
ferrible  within  this  agreement."^ 

In  these  several  cases  we  have  direct  confirmation  by 
both  Lord  Cranworth  and  Lord  Campbell  of  the  legal  effect 
of  Scott  V.  Avery.  In  Bussell  v.  Pellegrini  Coleridge  and 
Wightman  concur  with  Campbell. 

Again,  Baron  Martin,  who  differed  with  Lord  Cran- 
worth and  Lord  Campbell  in  Scott  v.  Avery,  says  himself 
in  1859:°  ''Scott  v.  Avery  has  overruled  all  the  previous 
decisions  on  the  subject."  ''Lord  Campbell  certainly  held 
that  an  agreement  to  refer  any  dispute  to  arbitration  is 
binding,  and  that  no  action  can  be  maintained  until  after 
an  adjudication  by  the  arbitrator."  And  "I  think  that 
the  decision  in  Scott  v.  Avery  cannot  be  upheld  unless  the 
judgment  of  Lord  Campbell  is  right."  ^° 

In  1859  an  appeal  was  taken  to  the  Court  of  Exchequer, 
in  Wickham  v.  Harding}^  A  contract  by  which  defendant 
engaged  plaintiff  to  manage  his  business  contains  the  fol- 
lowing arbitration  clause:  "That  in  case  any  dispute  or 
question  shall  arise  between  the  parties  in  respect  of  the 
carrying  on  of  the  business,  or  otherwise,  or  any  matters 
connected  with  or  in  relation  to  this  deed,  the  same  shall 
be  decided  by  two  persons.  ..."  The  court  stays  the 
action,  and  in  so  doing,  upholds  the  clause.  Pollock,  C.  B., 
says:  "The  parties  expressly  agreed  that  should  any  dis- 
pute arise  relating  to   the   defendant,   it  should   be   re- 

'  6  Ellis  &  Blackburn  1020,  at  pp.  1025,  1026.     Italics  ours. 

*Ihid.,  p.  1027. 

*  Horton  v.  Sayer,  4  Hurlstone  &  Norman  643,  at  p.  650. 

"Italics  ours.     See  post,  p.  186. 

"28  L.  .T.   (Exch.)   215. 


INTERPRETATION  OF  SCOTT  V.  AVERY    183 

ferred  to  arbitration.  Sometimes  parties  would  not  enter 
into  contracts  not  containing  such  a  clause."  l\Iartin,  B., 
sees  strong  reason  for  referring  to  arbitration,  "for  there 
are  no  eases  which  juries  are  more  apt  to  decide  against 
the  evidence  than  cases  of  this  kind,  in  which  it  is  said 
the  defendant's  character  is  concerned."  And  Baron 
Bramwell  remarks:  "But  clearly  this  action  must  involve 
matters  of  account,  and  they  are  very  unfit  for  a  jury. 
Moreover,  a  bargain  is  a  bargain,  and  the  parties  ought  to 
abide  by  it,  unless  a  clear  reaso7i  appears  for  their  not 
doing  so."^^ 

Seligmann  v.  Le  Boutillier  ^^  was  considered  in  the 
Court  of  Common  Pleas  in  1866.  An  arbitration  clause 
in  a  charter  party  is  reviewed.  "Should  any  dispute 
arise  betiveen  the  owners  and  the  charterers,  the  matters 
in  dispute  shall  be  referred  to  three  persons  at  Liverpool, 
one  to  be  appointed  by  each  of  the  parties  hereto,  and 
the  third  by  the  two  so  chosen;  their  decision,  or  any  two 
of  them,  shall  be  final;  and,  for  the  purpose  of  enforcing 
any  award,  this  agreement  may  be  made  a  rule  of  court." 
It  should  be  noted,  that  the  rule  of  court  applied  for  is 
"for  the  purpose  of  enforcing  any  award."  Obviously, 
if  either  party  could  revoke  at  will,  the  failure  of  one 
to  agree  upon  an  arbitrator  would  enable  suit  to  be  brought 
by  either.  But  the  Court  follows  Russell  v.  Pelligrini^* 
and  Wickham  v.  Harding.^^ 

At  this  time,  none  of  the  judges  refers  to  Vynior's 
Case,  Hide  v.  Petit,  Kill  v.  Hollister,  Milne  v.  Gratrix, 
King  v.  Joseph  or  Aston  v.  George,  and  it  would  seem 
as  though  the  original  judicial  error  were  judicially  cor- 
rected. However,  says  Maitland,  "It  is  perhaps  the  main 
fault  of  'judge-made  law'  (to  use  Bentham's  phrase)  that 

"Italics  ours. 

"L.  E.  1  C.  P.  681.     Italics  ours. 

"  6  E.  &  B.  1020,  26  L.  J.  (Q.  B.)  75. 

"28  L.  J.   (Exch.)   215. 


184  COMMERCIAL  ARBITRATION 

its  destructive  work  can  never  be  cleanly  done.  Of  all 
vitality,  and  therefore  of  all  patent  harmfulness,  the  old 
rule  can  be  deprived,  but  the  moribund  husk  must  remain 
in  the  system  doing  latent  mischief."  ^*  Though  my  Lord 
Coke's  dictum  regarding  the  revoeability  of  a  power  given 
to  arbitrators  is  destroyed  by  England's  highest  appellate 
tribunal,  and  though,  seemingly,  it  is  torn  up  from  the 
roots  by  the  Lord  Chancellor  and  his  colleagues,  its  "mori- 
bund husk"  remains  "in  the  system  doing  latent  mischief." 
Two  and  a  half  centuries  of  indulgence  in  error  have  left 
their  firm  impress  of  habit  in  the  thinking  processes  of  able 
and  learned  men.  "Absurd,"  "an  irrational  state  of  the 
law, ' '  Lord  Cranworth  thought ;  ' '  inveterate  error, ' '  Maule 
perceived. 

Inveterate  indeed.  Like  the  cat,  it  has  nine  lives; 
dropped  out  of  the  window,  it  comes  in  the  back  door.  For 
in  the  nest  quarter  of  a  century,  we  shall  see  Scott  v. 
Avery  "followed,"  "interpreted,"  "modified,"  sometimes 
a  revered  precedent,  sometimes  neglected;  but  in  1894 
the  sturdy  spirit  of  the  Common  Law  leads  it  again  into 
its  rightful  estate. 

In  1861,  in  Braunstein  v.  Accidental  Death  Ins.  Co}'' 
the  following  provision  of  a  policy  was  considered:  "... 
in  case  of  difference  of  opinion  as  to  the  amount  of  com- 
pensation payable  in  any  case,  the  question  should  be 
referred  to  the  arbitration  of  a  person  to  be  named  by 
the  secretary  for  the  time  being  of  the  Master  of  the 
Rolls,  and  all  expenses  and  costs  should  be  subject  to  the 
decision  of  such  arbitrator,  and  the  award  made  on  such 
arbitration  was  to  be  taken  as  a  final  settlement  of  the 
question,  and  might  be  made  a  rule  of  Court."  ^®  Cromp- 
ton,  J.,  speaking  for  the  Court,  Blackburn,  J.,  concurring, 

" Encyc'lopa?(lia  Britaunica,  11th  cd.,  Vol,  9,  p.  606,  art.  "English 
Law,"  by  F.  W.  Maitlaud. 
"  1  Bfist  &  Smith  782. 
"  lUd.,  p.  786. 


INTERPRETATION  OF  SCOTT  V.  AVERY     185 

held  that  "this  case  comes  within  the  principle  of  Scott 
V.  Avery"  and  added:  "I  think  we  may  construe  the  hav- 
ing the  amount  determined  by  a  third  party  as  part  of  the 
cause  of  action;  and  a  great  Judge,  Mr.  Justice  Maule, 
was  of  this  opinion."  ^" 

Commenting  on  this  case,  Judge  Allen  of  the  New  York 
Court  of  Appeals  ^^  says :  "In  Braunstein's  case  the  policy 
did  not,  in  terms,  declare  that  the  award  of  arbitrators 
should  he  a  condition  precedent  to  the  bringing  of  an 
action.  The  condition  was  to  the  effect  that,  in  case  of 
difference  of  opinion  as  to  the  amount  of  compensation,  the 
question  should  be  referred  to  arbitration,  and  the  award 
made  should  be  taken  as  a  full  settlement  of  the  question, 
and  the  legal  effect  was  to  prohibit  an  action  until  the 
amount  was  determined  hy  the  award.  The  court  held 
that  the  parties  had  used  sufficient  words  to  make  the 
reference  to  arhitratio7i  a  condition  precedent."  ^^  Ac- 
cordingly, the  words  "condition  precedent"  are  unneces- 
sary. The  sole  question  is.  Did  the  parties  desire  arbi- 
tration for  the  purpose  of  determining  their  rights? 

Had  the  Courts  of  England  not  yet  made  this  point 
clear?  It  seems  not.  For  in  1859,  in  the  Court  of  Ex- 
chequer,^^ Pollock,  C.  B.,  refuses  to  sustain  a  plea  based 
upon  an  arbitration  covenant  because  "It  falls  within  the 
rule  which  has  been  acted  on  for  above  a  century,  and 
according  to  which  the  superior  Courts  of  law  cminot  he 
ousted  of  their  jurisdiction  hy  the  mere  agreement  of  the 
parties;  or,  in  other  words,  that  an  agreement  to  refer 
does  not  prevent  the  parties  from  resorting  to  a  Court 
of  law  to  enforce  their  rights  or  redress  their  wrongs." "^^ 

^^ Ibid.,  p.  798.  (I.  E.  ''There  is  no  decision  which  prevents  two 
persons  from  agreeing  that  a  sum  of  money  shall  be  paid  upon  a 
contingency;  but  they  cannot  legally  agree,  that,  when  it  is  payable, 
no  action  shall  be  maintained  for  it."     8  Exch.  R.  497,  498,  499.) 

=^    50  N.  Y.  250,  at  p.  269. 

^Italics  ours. 

"Eorton  v.  Sayer,  4  H.  &  N.  643. 

*'  Ihid.,  p.  649.     Italics  ours. 


186  COMMERCIAL  ARBITRATION 

Baron  Martin  (who,  it  will  be  recalled,  had  himself  been 
reversed  in  Scott  v.  Avery)  says  in  this  case:  "I  do  not 
dissent;  but  I  cannot  distinguish  this  case  from  what  is 
laid  down  hy  Lord  Campbell  in  his  judgment  in  Scott 
V.  Avery.  It  seems  to  me  that,  if  that  judgment  is  right, 
this  plea  is  good;  and  I  think  that  the  decision  in  Scott 
V.  Avery  cannot  be  upheld  unless  the  judgment  of  Lord 
Camphell  is  right;  although  I  may  observe  that  some  of 
the  learned  Judges  found  their  judgments  on  a  contrary 
principle.  Scott  v.  Avery  was  nothing  more  than  the  case 
of  a  policy  of  insurance,  with  a  clause  that,  in  the  event 
of  any  difference  between  the  underwriters  and  the  in- 
sured, it  should  be  referred  to  arbitration.  Lord  Camp- 
bell certainly  held  that  an  agreement  to  refer  any  dis- 
pute to  arbitration  is  binding,  and  thai  no  action  can  be 
maintained  until  after  an  adjudication  by  the  arbitrator. 
It  seems  to  me,"  says  the  Baron  further,  ^'that  Scott  v. 
Avery  has  overruled  all  the  previous  decisions  on  the  sub- 
ject." He  is  of  opinion,  therefore,  that  ''If  parties  choose 
to  arrange  that,  before  any  actio7i  is  brought  on  a  policy 
of  insurance,  an  arbitrator  shall  ascertain  the  sum  to  be 
paid,"  that  seems  to  him  "only  a  circuitous  mode  of  say- 
ing that  710  action  shall  be  brought."  -^  And  he  is  glad 
to  find  that  under  the  11th  section  of  the  Common  Law 
Procedure  Act  of  1854,  if  action  be  commenced  "after 
the  parties  have  agreed  to  refer  any  differences  to  arbi- 
tration, the  Court  or  a  Judge  may  stay  the  proceed- 
ings. "  '^  In  consequence,  ' '  That  enactment, ' '  he  says, 
"renders  our  decision  in  this  case  of  less  importance  than 
it  otherwise  would  have  been."-° 

In  1862  (in  Exchequer),  in  Tredwen  v.  Holnmn,"  Baron 
Martin  writes  the  prevailing  opinion.    He  now  holds  valid 

**  Horton  v.  Sayer,  4  H.  &  N.  643,  at  p.  650.     Italics  ours. 

«/&«?.,  pp.  650-651. 

"Ibid.,  p.  651. 

"  1  Hurlstone  &  Coltman  72. 


INTERPRETATION  OF  SCOTT  V.  AVERY     187 

a  provision  in  an  insurance  policy  that  ^'all  other  cases 
of  dispute,  of  whatever  nature,  shall  he  referred  in  like 
manner;"  i.e.,  conformably  to  the  practice  at  Lloyd's  or 
Royal  Exchange,  "to  two  professional  average-staters, 
or  to  two  other  competent  persons,  with  power  to  such 
two  persons  to  appoint  an  umpire,  and  the  award  of  such 
two  persons  shall  be  final;"  ''and  no  action  at  law  shall 
he  hr&iight  until  the  arhitrators  have  given  their  decision." 
He  overrules  Horton  v.  Sayer,  in  which  he  concurred,  and 
says:  "The  third  rule,  which  is  incorporated  with  the  pol- 
icy, after  providing  for  disputes  as  to  average  claims 
and  claims  of  abandonment,  expressly  declares  that  all 
other  cases  of  dispute,  of  ivhatever  nature,  shall  he  re- 
ferred; and  no  action  ai  law  shall  he  hrought  until  the 
arhitrators  have  given  their  decision.  The  agreement  is 
clear  and  unambiguous,  and  the  parties  probably  meant  to 
act  upon  Scott  v.  Avery  and  exclude  the  jurisdiction  of 
the  Courts  of  law,  except  for  the  purpose  of  enforcing  the 
award  to  be  made  by  the  arbitrators."  ^^  Here  is  the  very 
clearest  indication,  not  seven  years  after  Scott  v.  Avery 
had  been  decided,  of  what  Baron  Martin  understood  Scott 
V.  Avery  to  mean.  He  says:  "A  ease  of  Horton  v.  Sayers 
{supra)  was  cited  and  relied  on  by  the  plaintiff.  But  we 
are  of  opinion  that  this  case  is  governed  by  the  case  of 
Scott  V.  Avery,  and  not  by  that  of  Horton  v.  Sayers."-^ 
And  by  way  of  reinforcement:  "The  plaintiff  is  there- 
fore in  the  wrong.  The  defendant  proposed  to  him  to 
refer  the  matter  in  dispute,  in  accordance  with  the  third 
rule,  to  which  he  refused  to  accede,  and  he  has  failed  to 
perform  that  which  is  a  condition  precedent  to  his  main- 
taining the  present  action."  ^'^ 

His  interpretation  of  Scott  v.  Avery  is  most  lucid,  and 
once  more  it  would  seem  as  if  Coke's  dictum  had  been 

'"Ibid.,  p.  81.    Italics  the  Court's. 

^Ibid.,  p.  81. 

^'^  Ibid.,  p.  81.    Italics  ours. 


188  COMMERCIAL  ARBITRATION 

overthrown.  But  no.  One  year  later,  in  Mills  v.  Bayley,^'^ 
Baron  Martin  retracts,  permits  counsel  to  cite  without 
disapproval  Milne  v.  Gratrix  and  King  v.  Joseph,  of  one 
flesh  with  Vynior's  Case,  and  joins  in  invalidating  a 
clause,  in  principle  the  same  as  that  in  Trediuen  v.  Hol- 
man.  His  words  are :  "If  this  agreement  had  been  simply 
that  Neville  should  measure  and  ascertain  the  quantity 
of  mud  removed  by  the  plaintiff,  there  would  have  been 
no  dif3ficulty,  because  he  would  not,  strictly  speaking,  have 
been  an  arbitrator,  and  the  authority  conferred  on  him 
would  have  been  irrevocable.  But,  with  respect  to  the 
other  part  (as  to  settlement  of  any  disputes  that  might 
arise  out  of  the  contract)  I  can  see  no  distinction  between 
that  and  an  ordinary  reference  of  matters  in  dispute, 
which  is  revocable.""-  "...  I  regret  that  the  law  is  so, 
and  that  the  legislature,  when  they  were  dealing  with  the 
subject  of  arbitration,  did  not  in  all  cases  prohibit  the 
revocation  of  references."  ^^ 

Even  in  Chancery,  the  Vice-Chancellor  is  slipping  into 
the  old  rut.  In  1861,  but  eight  years  after  Scott  v.  Avery, 
there  comes  up  Lee  v.  Page,^^  where  articles  of  copartner- 
ship provide  that  the  parties  submit  all  disputes  to  arbi- 
tration and  until  such  arbitration  take  place,  neither  party 
may  sue  the  other  with  reference  to  the  affairs  of  the  cor- 
poration. Kindersley,  V.  C,  holds  that  although  an  ar- 
bitration clause  is  legal,  there  may  not  be  a  negative  clause 
super-added  to  withdraw  the  decision  of  the  question  from 
the  tribunals  of  the  country. 

By  1867  the  Court  of  Exchequer  has  swung  far  away 
from  the  prevailing  opinion  in  Scott  v.  Avery.    In  Ellioit 

*^  2  Hurlstono  &  Coltman  36. 

''Ibid.,  p.  41. 

'^  Ibid.,  p.  41.  Italics  ours.  The  case  is  poorly  presented  and 
eounsel  for  the  plea  apparently  made  no  careful  study  of  the  au- 
thorities. 

"Law  Jov/rnal,  N.  S.  Vol.  30,  Part  I,  p.  857. 


INTERPRETATION  OF  SCOTT  V.  AVERY      189 

IK  Royal  Exchange  Assurance  Compat\y,^^  a  clause  in  an 
insurance  policy,  almost  identical  with  Baron  Martin's 
conception  of  the  clause  in  Scott  v.  Avery,^^  is  treated  as 
void  and  the  plaintiff  is  permitted  to  sue  on  the  policy, 
without  a  reference  to  arbitration.  Now,  Bramwell,  who 
was  defendant's  counsel  in  Scott  v.  Avery,  takes  the  occa- 
sion to  say:^^  "In  the  argument  of  that  case  (the  ar- 
bitration clause  in  which  was  framed  by  IMr.  Justice  Cress- 
well),  Mr.  Manisty  and  myself  were  counsel  for  the  de- 
fendants. "We  scarcely  cited  a  case,  but  laid  dowTi  a 
proposition  which  was  almost  immediately  adopted  by  the 
judges  below,  and  by  the  House  of  Lords.  That  proposition 
was  that  if  two  persons,  whether  in  the  same  or  in  a  dif- 
ferent deed  from  that  which  creates  the  liability,  agree 
to  refer  the  matter  upon  which  the  liability  arises  to 
arbitration,  that  agreement  does  not  take  away  the  right 
of  action.  But  if  the  original  agi'eement  is  not  simply  to 
pay  a  sum  of  money,  but  that  a  sura  of  money  shall  be 
paid  if  something  else  happens,  and  that  something  else 
is  that  a  third  person  shall  settle  the  amount,  then  no 
cause  of  action  arises  until  the  third  person  has  so  as- 
sessed the  sum.  For  to  say  the  contrary  would  be  to 
give  the  party  a  different  measure  or  rate  of  compensation 
from  that  for  which  he  has  bargained.  This  is  plain  com- 
mon sense,  and  is  what  I  understand  the  House  of  Lords 
to  have  decided  in  Scott  v.  Avery." 

In  this  opinion,  Kelly,  Martin  and  Pigott  concur;  but, 
as  we  have  already  seen,  the  Baron  was  in  error  in  his 
construction  of  the  decision  of  Scott  v.  Avery,  just  as  he 
was  in  error  in  his  argument  as  counsel  in  that  case  before 
the  House  of  Lords.  For  research  and  industry  he  sub- 
stituted ingenuity  and  subtlety — a  not  infrequent  recourse 
of  busy  and  successful  practitioners.     Like  most  of  the 

"L.  R.  2  Exch.  237. 

"'Supra,  p.  186. 

"  L.  E.  2  Exch.  237,  at  p.  245,  246. 


190  COMMERCIAL  ARBITRATION 

English  lawyers  of  his  day,  he  accepted  Coke's  dictum 
as  part  of  the  Common  Law  and  searched  no  farther. 
In  Scott  V.  Avery  he  permitted  his  adversary  to  cite 
Kill  V.  Hollister  and  Thompson  v.  Charnock,  without  crit- 
icism. 

In  1870  we  find  Thomson  v.  Anderson, ^^  in  Chancery, 
Malins,  V.  C,  holds  too,  that  a  general  covenant  in  part- 
nership articles  to  submit  differences  to  arbitration  is  re- 
vocable, notwithstanding  the  Common  Law  Procedure  Act 
of  1854.  Counsel  for  the  plaintiff  relies  on  Mills  v.  Bay- 
ley.  Counsel  for  the  defendant  quotes  Lord  Cranworth 
(Drew  V.  Drew^^)  and  Harcourt  v.  Ramshottom.  Ap- 
parently he  could  find  no  other  authorities — not  even  Dinis- 
dale  V.  Bohertson.  The  Vice-Chancellor  says:  "The  next 
question  is,  whether  this  is  a  revocable  instrument.  Now, 
upon  that  subject  I  have  had  much  argument,  and  I  have 
been  referred  to  authorities.  It  is  not  questioned  that 
before  the  statute  3  and  4  Will.  4,  c.  42,  all  references  to 
arbitration  were  revocable  utitil  the  award  tvas  made"!!*° 
Yet,  he  says,  "but  that  a  person  should,  when  he  had  once 
made  a  reference  to  arbitration,  be  entitled  from  mere 
caprice  to  revoke  it  is,  in  my  opinion,  a  monstrous  state 
of  things,  and  it  has  been  so  regarded  by  many  Judges." *^ 
Nevertheless,  he  feels  constrained  to  follow  Baron  Martin 
in  Mills  V.  Bayley *~  as  "a  distinct  authority  upon  the 
point,"  with  "nothing  against  it  but  that  dictum  of  Lord 
Cranworth 's"  in  Dreiv  v.  Drew^^ — which  "did  not  apply 
to  an  English  case."  Therefore,  he  must  find  obsequiously 
that  the  arbitration  is  revocable  and  the  Common  Law 
Procedure  Act  had  not  changed  the  Common  Law  in  this 
respect. 

"L.  K.  9  Eq.  523. 

^"See  ante,  p.  180.     (2  Macq.  1,  4.) 

*"  L.  R.  9  Eq.  .'523,  at  p.  529.     Italics  ours. 

"  Ihid.,  pp.  529-530.     Italics  ours. 

*^Ante,  p.  188. 

«»See  ante,  p.   180. 


INTERPRETATION  OF  SCOTT  V.  AVERY     191 

Next  in  order  of  examination  is  In  Be  Rouse  and  Meier 
in  the  Court  of  Common  Pleas  **  in  1871,  wherein  Willes, 
J.,  permits  himself  to  say,  concerning  the  rule  in  Vynior's 
Case,  "my  act  or  my  words  cannot  alter  the  judgment 
of  the  law  to  make  that  irrevocable  which  is  of  its  own 
nature  revocable." — "That  law,  as  to  arhitrations,"  he 
is  betrayed  into  saying,  *'was  never  questioned." "^^  "In 
the  course  of  time  it  was  thought  desirable  that  submis- 
sions to  arbitration  should  be  irrevocable,"  but  in  his 
opinion:  "The  9  &  10  Wm.  3,  c.  15,  was  the  first  hut  an 
imperfect  step  in  that  direction."*^  It  follows  for  him 
that,  since  the  contract  in  the  case  under  review  made 
no  provision  for  making  the  submission  a  rule  of  court, 
it  was  revocable  at  the  ivill  of  either  party,  in  spite  of  the 
enactment  by  Parliament.  The  influence  even  at  this 
late  day  of  the  dictum  in  Vynior's  Case  is  clearly  demon- 
strated in  the  repeated  references  thereto  by  the  judges. 
Montague  Smith  and  Brett  concur. 

But  one  year  later  Caledonian  Bailway  Company  v. 
Greenock  and  Wemyss  Bay  Bailway  Co.*^  reaches  the 
House  of  Lords,  a  case  where  the  arbitration  clause  reads, 
"all  differences  which  may  arise  between  the  parties  here- 
to respecting  the  true  meaning  or  effect  of  this  agree- 
ment, or  the  mode  of  carrying  the  same  into  operation, 
shall,  from  time  to  time,  so  often  as  any  such  questions 
or  differences  shall  arise,  be  referred  to  arbitration,  in 
terms  of  the  Railway  Clauses  Consolidation  (Scotland) 
Act,  1845,  and  the  provisions"  (for  arbitration  in  such 
act)  are  "incorporated  with  this  agreement  ...  as  if 
they  were  verhatim  inserted  therein."  This  the  Lords 
sustain,  Lord  Kinloch  saying,  ''such  arbitration  clauses 
are  now  extremely  common/'^'' 

««L.  R.  6  C.  P.  212. 

*^  Ibid.,  p.  217.     Italics  ours. 

«10  Sess.  Cases  (3rd  Series)    (1871-2),  892. 

*^  lUd.,  p.  898.     Italics  ours. 


192  COMMERCIAL  ARBITRATION 

However,  in  1876,  the  Queen's  Bench  Division  holds 
that  even  the  Common  Law  Procedure  Act  had  not  made 
an  agreement  to  arbitrate  irrevocable.**  Blackburn  here 
cites  Mills  v.  Bayley  and  Rouse  v.  Meier ^^  Yet  he  says: 
"If  the  plaintiffs  go  on  with  the  action  there  is  no  rem- 
edy at  all,  but  if  the  action  is  stayed  they  may  get  rid 
of  the  stay  by  offering  to  concur  with  the  defendant  in 
allowing  the  arbitrator  to  make  his  award,  which  it  would 
be  just  and  proper  he  should  make. ' '  ^**  And  he  asks : 
"Why  should  not  this  agreement  be  enforced  by  a  stay 
of  the  action,  assuming  no  reason  on  the  merits  to  be 
shewn  against  it  ? "  ^'^  But  his  colleagues  disagree  with 
him.  Quain,  J.,  prevailing,  goes  back  to  Vynior's  Case 
for  his  authority   (p.  754). 

A  year  earlier  (1875)  arose  Edwwrds  v.  The  Aberayron 
Mutual  Ship  Insurance  Society  (Limited) ,  in  Exchequer 
Chamber  (Queen's  Bench  Division ),^^  a  case  on  all  fours 
with  Tredwen  v.  Holman.  Blackburn  votes  to  sustain  the 
clause.  Mellor  is  of  the  same  opinion.  He  relies  on  Tred- 
wen V.  Holman,  saying:  "I  think  it  is  quite  competent 
for  the  society  (the  defendant  mutual  insurance  society) 
to  establish  a  domestic  forum  that  shall  decide  all  disputes 
which  shall  arise  between  the  members,  and  that  they 
shall  not  resort  to  a  court  of  law,"  etc.^-  Lush  concurs 
with  this  view.  He  finds  that  the  contract  means :  "  *  We 
hold  your  vessel  to  be  insured  subject  to  the  terms  ex- 
pressed in  the  articles'  "  and,  says  he,  "those  terms  are 
that  in  case  of  loss,  or  a  claim  for  loss,  the  whole  matter 
is  to  be  investigated  by  the  directors,  the  amount  pay- 
able, if  any,  is  to  be  ascertained  by  them,  and  their  de- 
cision is  to  be  final,"  etc.  "This  being  so,  the  case  is 
clearly  within  Scott  v.  Avery." ^^ 

^''Eandell  v.  Thompson,  L.  E.  1  Q.  B.  D.  748. 

**Sce  ante,  p.  If)], 

~L.  R.  1  Q.  B.  D.  748,  at  p.  753. 

"L.  R.  1  Q.  B.  D.  5G.-5. 

*' Ibid.,  p.  57G.  Italics  ours.  ^  Ibid.,  pp.  577-578. 


INTERPRETATION  OF  SCOTT  V.  AVERY     193 

On  appeal  to  the  Exchequer  Chamber,  the  Court  below 
is  reversed.  Araphlett,  B.,  says  the  question  whether  this 
clause  is  "void  as  being  against  the  policy  of  the  law" 
is  settled  by  Scott  v.  Avery.  He  refers  to  Tredwen  v. 
Holmmi,  Elliott  v.  Royal  Exchange  Assurance  Co.  and 
Dawson  v.  Fitzgerald  and  finds  the  case  before  him  is  gov- 
erned by  Tredwen  v.  Holman,  but  votes  for  reversal  be- 
cause the  directors  came  to  a  decision  without  hearing  the 
plaintiff,  and  because  they  were  arbitrators.  "The  delicate 
task  of  adjudicating  between  their  own  society  and  a 
member"  required  them  "to  act  judicially  and  with  per- 
fect fairness  and  impartiality  between  the  parties."  Con- 
sequently, to  come  to  a  decision  without  giving  the  plain- 
tiff an  opportunity  to  be  heard  "was  contrary  to  every 
principle  of  justice,  and  ought  not  ...  to  be  held,  by 
any  Court  of  Law  or  Equity,  to  be  binding  upon  him.  "°* 

Pollock,  B.,  says  the  case  comes  within  Scott  v.  Avery, 
Tredwen  v.  Holman  and  Elliott  v.  Royal  Exchange  Assur- 
ance Co.  and  votes  for  affirmance.     Archibald  concurs. 

Brett,  J.,  later  Lord  Esher,  writes  for  reversal.  He 
whittles  down  Scott  v.  Avery  until  there  is  little  left  of 
it.  He  examines  the  rules  of  the  defendant  company  and 
finds  that  "The  stipulations  as  to  the  procedure  before 
the  average  adjuster  shew  that  those  who  drew  the 
rules  intended  that  there  should  in  all  the  inquiries  be 
a  judicial  investigation  before  a  tribunal;  which,"  says 
he,  "is  therefore  a  judicial  tribunal."  These  rules  do 
not  leave  ' '  the  liability  to  pay  to  be  established  before  the 
ordinary  courts,"  but  in  fact,  as  it  seems  to  him,  are  "in- 
tended to  create  a  tribunal  to  hear  and  determine  every 
question  which  may  arise  in  respect  of  a  policy  made 
with  the  society,  and  to  determine  everything  finally  and 
compulsorily,  so  as  to  prevent  any  application  to  the  or- 
dinary courts."  ^^     We  may  say  that,  in  his  legal  inter- 

"Zbtd,  p.  579. 

^^  Ibid.,  p.  591.     Italics  ours. 


194.  COMMERCIAL  ARBITRATION 

pretation  of  the  terms  of  the  policy,  the  learned  judge 
was  entirely  correct.  "Then  arises  the  question,"  he 
says,  "what  is  the  law?"  Preferring  to  follow  Horton  v. 
Sayer,^^  he  quotes  the  opinions  of  Pollock  and  Braniwell, 
the  latter  especially  upon  the  meaning  of  Scott  v.  Avery. 
And  here,  too,  he  is  astute,  for  hoth  Pollock  and  Bram- 
well,  as  we  have  already  seen,  had  very  much  narrowed 
the  meaning  of  Scott  v.  Avery.  Brett  observes  that  all 
the  judges  say  "You  cannot  oust  the  courts  of  jurisdic- 
tion." Here,  he  finds  a  clause  which  in  practical  effect 
leaves  nothing  for  the  courts  to  do  except  enforce  an 
award.  Ergo,  he  argues,  this  must  he  void.  Kelly,  C.  B., 
agrees  with  him  but  admits  that  "undoubtedly  there  is 
much  in  the  language  of  Lord  Campbell  in  his  judgment 
which,  taken  by  itself,  might  seem  to  shew,  as  Baron 
Martin  5^  (I  think,  incorrectly),  held,  that  it  put  an  end  to 
the  doctrine  against  the  ousting  of  the  jurisdiction  of 
the  Courts."  ^^ 

This  case  is  frequently  cited,  especially  in  American 
courts,  in  support  of  the  general  doctrine  that  "You 
cannot  oust  the  courts  of  jurisdiction  by  a  general  arbi- 
tration clause,"  and  as  indicating  that  Baron  Martin 
was  in  error  in  stating  that  Scott  v.  Avery  had  reversed 
"all  other  English  cases."  But  a  closer  study  of  the  ease 
reveals  that  Blackburn,  Mellor,  Lush,  Amphlett  and  Pol- 
lock follow  Tredwen  v.  Eolman  and  the  Cranworth-Camp- 
bell  interpretation  of  Scott  v.  Avery;  while  only  Brett, 
later  Lord  Esher,  and  Kelly  follow  Bram well's  narrower 
interpretation. 

Seventeen  years  later  (1892)  in  Trainor  v.  Phoenix 
Fire  Ass.  Co.,^^  Lord  Coleridge,  then  Lord  Chancellor, 
criticises   Lord   Esher  sharply   for  his   endeavor   in  the 

**Sec  ante,  pp.  185-186. 

"In  Borton  v.  Saycr,  4  H.  &  N.  642,  at  p.  649.    See  ante,  p.  186. 

*'  L.  R.  1  Q.  B.  D.  563,  at  p.  598.     Italics  ours. 

"'See  post,  pp.  211-212. 


INTERPRETATION  OF  SCOTT  V.  AVERY     195 

Aherayron  ease  to  limit  the  scope  and  meaning  of  Scott 
V.  Avery  as  an  authority,  and  thirty-two  years  later  (1907) 
in  Gaw  v.  British  Law  Fire  Ins.  Co.,  Holmes,  L.  J.,  makes 
it  clear  that  Brett's  views  were  not  to  be  treated  as  pre- 
vailing in  the  Aherayron  case;  indeed,  that  in  the  later 
case  of  Scott  v.  Mercantile  Accident  and  Guarantee  Ins. 
Co.,  which  we  shall  review  in  a  moment,  ''Lord  Esher 
himself  gave  a  judgment  absolutely  inconsistent  with  his 
dicta  in  the  Aherayron  case." '^'^ 

But  in  187G,  Lord  Coleridge  himself  had  not  yet  over- 
come his  earlier  views,  which,  as  expressed  by  him  in 
Scott  V.  Avery,  differed  sharply  with  those  of  Lords  Cran- 
worth  and  Camphell.  In  Dawson  v.  Fitzgerald  (Excheq. 
Div.)  ^^  he  adopts  Bramwell's  statement:  "If  two  per- 
sons, whether  in  the  same  or  in  a  different  deed  from 
that  which  creates  the  liability,  agree  to  refer  the  matter 
upon  which  the  liability  arises  to  arbitration,  that  agree- 
ment does  not  take  away  the  right  of  action.  "^^  In  ex- 
pressing his  opinion  in  Scott  v.  Avery,  Lord  Coleridge,  it 
will  be  recalled,  had  said:*'^  "If  two  parties  enter  into 
a  contract,  for  the  breach  of  which  in  any  particular  an 
action  lies,  they  cannot  make  it  a  binding  term,  that  in 
such  event  no  action  shall  be  maintainable,  but  that  the 
only  remedy  shall  be  by  reference  to  arbitration."  But 
he  said,  "Whether  this  rests  on  a  satisfactory  principle 
or  not  may  well  he  questio7ied ;  hut  it  has  heen  so  long 
settled,  that  it  cannot  be  disturbed."  In  1892,  however, 
at  three  score  years  and  ten,  Lord  Coleridge  thought  dif- 
ferently.®* 

Lord  Esher,  too,  went  very  far  in  the  wrong  direction, 
before  he  returned  to  the  true  line.     In  1883,  as  Master 

'"See  post,  pp.  213-214. 

~L.  E.  1  Exch.  D.  257,  at  p.  260. 

•"L.  E.  2  Exch.  237,  at  p.  245  (Elliott  v.  Royal  Exchange  Ass.  Co.). 

«3  5  H,  L.  C.  at  p.  841.     Italics  ours. 

"/See  post,  pp.  210-212. 


196  COMMERCIAL  ARBITRATION 

of  the  Rolls  in  Fraser  v.  Ehrensperger  ^^  he  revives  Lord 
Coke's  dictum.  He  says:  "In  Vynior^s  Case  Lord  Coke 
says,  'If  I  make  a  letter  of  attorney  to  make  livery  or 
to  sue  an  action,  &c.,  in  my  name,'  'or  if  I  suhmit  myself 
to  an  arbitrament,  although  these  are  made  by  express 
words  irrevocable,  or  that  I  grant  or  am  bound  that  all 
these  shall  stand  irrevocably,  yet  they  may  be  revoked.'  "  ^" 
This  is  a  case  in  which  an  agreement  to  arbitrate  is  re- 
voked by  one  of  the  parties.  Brett  now  holds  that  even 
the  statutes  of  Parliament  (3  &  4  Wm.  4,  c.  42  and  Com- 
mon Law  Procedure  Act,  1854)  have  not  removed  this 
right  to  revoke,  which  he  declares  is  "one  of  the  inci- 
dents of  an  arbitrator  that  he  is  a  mandatory,  and  that 
by  the  law  of  England  before  the  mandate  is  completed 
it  can  be  revoked  and  withdrawn. "  ^^  As  we  shall  see, 
however.  Lord  Esher,  like  Lord  Coleridge,  lived  to  mod- 
ify these  views. 

Even  the  Act  of  1889  did  not  stop  Lord  Esher  at  this 
time.  In  1890,  in  Smith  &  Service,^^  he  reverses  Coleridge 
and  Willes  in  the  Court  of  Appeals  and  holds  that,  where  an 
agreement  in  a  charter  party  provides  for  a  reference  to 
three  parties,  one  to  be  appointed  by  each  of  the  parties  and 
the  third  by  the  two  so  appointed,  the  Court  has  no 
power,  "either  under  or  apart  from  the  Arbitration  Act, 
1889,"  to  order  a  party  who  fails  or  refuses  to  appoint 
his  arbitrator  to  make  such  an  appointment.  Here  he  said 
to  counsel:  "A  Court  of  Equity  had  no  power  to  decree 
specific  performance  of  an  agreement  to  refer  to  arbi- 
tration; but  you  suggest  that  the  Courts  of  Common  Law 
had  such  a  power."  To  which  counsel  reply:  "Yes;  the 
rule  of  Court  was  in  itself  a  decree  of  specific  perform- 

"L.  R.  12  Q.  B.  D.  310. 
"lUd.,  p.  31 G. 
'"Ibid.,  p.  318. 
•  L.  R.  25  Q.  B.  D.  545. 


INTERPRETATION  OF  SCOTT  V.  AVERY     197 

ance. ' '  ®°  Lindley,  L.  J.,  says :  "If  that  ar^raent  were 
sound,  a  great  many  things  would  follow  from  it.  It 
would  follow  that  the  Court  could  have  done  a  great 
number  of  things  in  arbitrations  which  the  Court  has 
declined  to  do  over  and  over  again."  Not  always,  as 
we  have  seen.  "In  the  first  place,  I  do  not  see  why  the 
Court  should  not  have  been  asked  to  make  an  order  of 
this  sort  ages  ago."  They  were  and  they  did,  only  the 
learned  judge  did  not  know  it.  "I  cannot  see  why  it  is 
consistent  with  any  such  theory  that  there  should  be  a 
total  absence  of  any  authority  for  the  enforcement  of  a 
submission  in  the  same  way  that  the  Court  has  enforced 
an  award.  It  has  long  been  settled  law  that  the  Court 
will  not  grant  specific  performance  of  an  agreement  to 
refer;  but,  if  this  argument  is  sound,  it  is  difficult  to  see 
why  there  should  not  have  been  specific  performance  of  a 
portion  of  the  agreement — that  is  to  say,  why  one  party 
should  not  have  had  a  decree  compelling  the  other  party 
to  proceed  and  appoint  an  arbitrator. ' '  '^"  But  see  later, 
in  1916,  post  p.  223,  and  per  contra  Manchester  Ship  Canal 
Co.  V.  S.  Pearson  &  Son,  Limited,  in  Q.  B.  Div.,  C.A,, 
L.  R.  Q.  B.  D.  1900,  Vol.  II,  at  606. 

No  one  discusses  Halfhide  v.  Fenning,  Waters  v.  Tay- 
lor, Dimsdale  v.  Bohertson  or  Harcourt  v.  Ramshottom. 
The  only  cases  referred  to  at  all  are  Gumm  v.  Hallett,''^ 
Thomson  v.  Anderson,''^  Randell  v.  Thompson,''^  In  re 
Bouse  and  Meier,''^  Fraser  v.  Ehrensperger,''^  Davila  v. 
AlmanzaJ^ 

But  Esher  and  Coleridge  were  not  alone.  In  1889,  in 
the  Court  of  Appeal,  before  Cotton,  Lindley  and  Lopes, 

"Ibid.,  p.  547. 
™  Ibid.,  pp.  551-552. 
"  L.  R.  14  Eq.  555. 
"L.  R.  9  Eq.  523. 
^»L.  R.  1  q.  B.  D.  748. 
"L.  R.  6  C.  P.  212. 
»L.  R.  12  Q.  B.  D.  310. 
« 1  Salk.  73. 


198  COMMERCIAL  ARBITRATION 

came  Davis  v.  Starr. '^'^  The  Common  Law  Procedure  Act 
of  1854  provided  "that  whenever  the  parties  to  any  in- 
strument in  writing  thereafter  made  shall  agree  that  any- 
then  existing  or  future  differences  between  them  or  any 
of  them  shall  be  referred  to  arbitration,  and  any  one  or 
more  of  the  parties  so  agreeing,  or  any  person  or  persons 
claiming  through  or  under  him  or  them,  shall  nevertheless 
commence  any  action  against  the  other  party,  or  any  per- 
son claiming  through  or  under  him,  'it  shall  be  lawful 
for'  the  court  or  a  judge,  on  the  defendant's  application, 
after  appearance  and  before  plea  or  answer,  'upon  being 
satisfied  that  no  sufficient  reason  exists  why  such  matters 
cannot  be,  or  ought  not  to  be,  referred  to  arbitration 
according  to  such  agreement  as  aforesaid,  and  that 
the  defendant  was,  at  the  time  of  the  bringing  of 
such  action  or  suit,  and  still  is,  ready  and  willing  to 
join  and  concur  in  all  acts  necessary  and  proper  for  caus- 
ing such  matters  so  to  be  decided  by  arbitration,  to 
make  a  rule  or  order  staying  all  proceedings  in  such 
action  or  suit,  on  such  terms  as  to  costs  and  otherwise 
as  to  such  court  or  judge  may  seem  fit.'  "  The  Court 
refuses  to  stay  an  action  upon  an  agreement  for  ser- 
vices, wherein  there  was  the  following  clause:  "If,  dur- 
ing the  continuance  of  this  agreement,  or  at  any  time 
afterwards,  any  difference  shall  arise  between  the  parties 
hereto,  ...  in  regard  to  the  construction  of  any  of  the 
agreements  herein  contained,  or  to  any  payment,  act,  deed, 
matter  or  thing  relating  to  this  agreement,  or  arising  there- 
from, such  difference  shall  he  forthwith  referred  to  two 
arbitrators,  one  to  he  appointed  hy  each  party  in  differ- 
ence, or  to  an  umpire  to  he  chosen  by  the  arbitrators  he- 
fore  entering  on  the  consideration  of  the  matters  referred 
to  them,  and  every  such  reference  shall  be  deemed  an  ar- 
bitration within  the  Common  Law  Procedure  Act  1854, 
and  be  siibject  to  the  provisions  as  to  arbitration  contained 
"60  L.  T.  E.  797. 


INTERPRETATION  OF  SCOTT  V.  AVERY     199 

in  the  said  Act."  Cotton  says:  ^'Before  the  Act  the  courts 
had  held  that  there  was  no  power  to  stay  an  action  in 
such  circumstances,  and  that  such  an  agreement  ought  not 
to  be  enforced^  as  it  was  an  attempt  to  oust  the  juris- 
diction  of  the  ordinarg  tribunals.  But  the  Common  Law 
Procedure  Act  ISS^l,  though  it  does  not  deprive  the  court 
of  jurisdiction  to  decide  the  dispute  between  the  parties, 
enables  the  court,  by  way  of  specific  performance,  to  stay 
an  action  which  is  brought  in  violation  of  an  agreement 
to  refer  to  arbitration."^^  Here  each  party  charged  the 
other  with  breach  of  contract.  The  judge  thinks  "a  jury 
is  not  an  improper  tribunal  for  trying  the  action. ' '  '^^ 

But  this  case  is  clearly  overruled  by  Scott  v.  Mercan- 
tile Accident  and  Guarantee  Insurance  Company,''^  de- 
cided in  1892,  and,  in  1897,  by  Re^ishaw  v.  Queen  Anne 
Mansions  Co.  ^^ 

In  1875,  in  the  House  of  Lords,  in  Bremner  v.  Elder,^^ 
a  Scotch  ease  came  up  concerning  a  dispute  between  two 
parishes  as  to  the  settlement  of  a  pauper.  It  was  re- 
ferred by  them  to  the  decision  of  a  Society  of  Inspectors 
which  was  in  the  habit  of  deciding  such  questions  by  vote 
at  their  general  meetings.  Though  no  definite  persons 
were  named  and  it  was  conceded  to  be  uncertain  what 
members  would  be  present,  the  House  of  Lords  sustained 
both  the  reference  and  the  award. 

Lord  Hatherley  likens  this  case  to  a  general  agreement 
"to  refer  disputes  to  a  body  like  a  Chamber  of  Com- 
merce" and  can  find  no  Scotch  decision  against  it.  He 
would  "be  extremely  sorry,"  he  says,  ".  .  .  .  for  your 
Lordships  to  come  to  any  such  conclusion  in  this  or  in 
any  other  similar  case  with  respect  to  an  award  decided 
by  a  body  like  this  Society  of  Inspectors"  which  seems 

"76tU,  p.  798. 

'» See  post,  pp.  213-214,  66  L.  T.  R.  811. 

*"See  post,  pp.  214-215,  L.  R.  [1897]  1  Q.  B.  D.  662. 

^  2  Sess.  Cases  (4th  Series)  136,  at  p.  143,  144,  145.     Italics  ours. 


200  COMMERCIAL  ARBITRATION 

to  be  "composed  of  men  eminently  qualified  to  express 
a  judgment  upon  a  point  of  the  character  which  had 
arisen  in  the  dispute  between  these  parishes."  These  men 
have  "apparently  so  far  acquired  the  confidence  of  per- 
sons who  might  be  brought  into  litigation  for  very  small 
amounts  of  money,  for  which  economical  and  expeditious 
justice  would  naturally  be  desired  by  all  parties,  that  such 
disputes  were  frequently  referred  to  them"  and  His  Lord- 
ship would  be  "extremely  sorry  that  a  body  so  competent 
as  this  in  respect  of  knowledge  and  acquirements  should 
not  be  held  to  be  in  law  competent  to  undertake  the  duty 
of  arbiters."  He  finds  that  their  decisions  are  rarely 
questioned,  though  they  are  not  a  corporation,  but  "are 
a  fluctuating  body,  and  it  is  not  always,  indeed  "but  seldom, 
that  you  can  know  who  are  or  who  are  not  to  te  the 
particular  persons  who  will  sit  in  judgment  upon  a  par- 
ticular matter.  But  why  that  should  disqualify  or 
incapacitate  them  from  being  selected  as  arbiters  ...  on 
the  strength  of  an  abstract  or  an  a  priori  reasoning,  it 
appears  .  .  .  very  difficult"  for  him  "to  comprehend." 
He  accordingly  holds  and  the  other  Lords  agree  that  there 
is  no  authority  against  such  a  reference.  This  is  clear 
authority  for  the  validity  of  a  general  reference  to  a 
Board  of  Trade  or  Chamber  of  Commerce. 

In  1878,  in  Queen's  Bench  Division  on  appeal  from  a 
decision  by  Lopes,  J.,  Cockbum  and  Mellor  hold  valid, 
in  Moffat  v.  Cornelius  ®-  a  clause  in  a  contract  of  sale 
of  a  cargo  of  maize  in  the  following  form:  ''Should  any 
dispute  arise,  contract  not  to  be  void,  it  being  agreed  by 
buyers  and  sellers  to  leave  the  same  to  be  settled  by  two 
London  corn  factors  respectively  chosen,  with  power  to 
call  in  an  umpire,  whose  decision  is  to  be  final;  and  this 
stipulation  to  be  made  a  rule  of  court  of  amy  of  the  di- 
visions of  the  High  Court  of  Justice  in  London  on  the 
application  of  either  party."     Bigham,  for  the  plaintiff, 

"26  Weekly  Reporter  914. 


INTERPRETATION  OF  SCOTT  V.  AVERY    J201 

says:  "Where  the  contract  itself  contains  an  agreement 
to  refer,  the  cases  of  Scoft  v.  Avery  and  Horton  v.  Sayer 
apply.  This  case  is  within  the  decision  of  the  Court  of 
Appeal  in  Eandell  v.  Thompson."  To  which  Cockburn. 
C.  J,,  replies:  "The  distinction  there  made  is  subtlety 
itself.  .  .  .  Where  a  person  has  hound  himself  solemnly 
to  an  agreement,  he  alone  cannot  revoke  it.  The  stipu- 
lation to  refer  is  part  of  the  agreem£nt,  and  forms  part 
of  the  consideration  for  it."  ®^  Mellor  was  of  opinion  that 
the  provision  of  the  Common  Law  Procedure  Act  of  1854 
would  be  rendered  "nugatory,  and  it  might  as  well  be 
expunged"  if  the  doctrine  contended  for  prevailed.  If 
it  did,  says  he:  ''Any  person  desiring  to  avoid  an  arhi- 
tratian  mi^ht  revoke  at  any  time."  ^^ 

In  1877  we  find  Mellor,  J.,  saying  in  another  case :  ** 
"If  two  persons  choose  to  agree  that  neither  of  them 
shall  have  any  right  of  action  under  an  agreement  until 
a  third  person  has  given  his  decision  upon  the  matter 
in  question,  as  in  the  case  of  a  wager,  &c.,  the  agreement 
is  binding.  It  is  quite  reasonable  that  people  should  en- 
deavor as  far  as  possible  to  avoid  the  necessity  of  having 
recourse  to  courts  of  law."^^ 

And  in  1875,  in  Rolls  Court ^^  (Equity),  we  find  Sir 
G.  Jessel  saying:  "Certainly  these  arbitrations  have  not 
been  looked  upon  very  favorably  by  courts  of  law.  Many 
strict  and  some  absurd  rules  were  laid  down  at  a  period 
when  courts  of  law  seemed  to  consider  a  reference  to 
arbitration  to  be  something  wrong,  or  as  an  attempt  to 
oust  the  ordinary  jurisdiction  of  the  court.  That  period 
has  passed  away.    Both  the  Legislature  and  the  Judicature 

^^  Italics  ours. 

**  Italics  ours. 

^London  Tramways  Company  v.  Bailey,  L.  E.  3  Q.  B.  D.  217,  at 
p.  221. 

'*  Italics  ours. 

"  Eipley  v.  Great  Northern  Railway  Company,  31  L.  T.  R.  869,  at 
p.  870.     Italics  ours. 


202  COMMERCIAL  ARBITRATION 

rather  encourage  than  discourage  references  to  arbitration 
when  fairly  and  honestly  conducted,  and,  so  far  as  arbi- 
trators have  power  to  do  so,  and  capacity  for  doing  so, 
legally  conducted. ' '  ** 

In  1879,  in  the  Chancery  Division,^^  Piercy  v.  Young 
comes  up.  The  suit  is  for  a  partnership  accounting.  The 
arbitration  clause  in  the  partnership  articles  is  simply : 
"Any  differences  or  disputes  which  may  arise  between  the 
partners  shall  be  settled  by  an  arbitrator  to  be  agreed 
upon  between  the  partners,  and  his  decision  shall  be 
final  and  binding  upon  all  parties."  Here  was  no  cov- 
enant that  the  submission  to  arbitration  should  be  made 
a  rule  of  court.  The  suit  was  for  an  accounting  brought 
by  one  partner  against  the  other.  Now,  Jessel,  M.  R., 
says:  ".  .  .  we  are  all  clearly  of  opinion  that  a  general 
agreement  to  refer  matters  in  dispute  to  arbitration  can- 
not be  revoked.  The  authorities  cited  have  no  applica- 
tion." (The  authorities  cited  are  old  friends.  They  in- 
clude Mills  V.  Bayley  and  Be  Bouse  and  Meier.)  In  a 
footnote  it  is  said  that  in  a  similar  case  of  Chri^ie  v. 
Nohle,  before  Jessel,  M.  R.,  on  the  16th  of  April,  1880, 
"His  Lordship  followed  the  above  decision,  considering 
himself  bound  by  it.  His  Lordship  observed  that,  al- 
though a  particular  suhmissioii  to  arhitration  might  he 
revoked,  a  partner  could  no  more  revoke  a  general  agree- 
ment to  refer  than  he  could  revoke  any  other  contract  in 
the  partnership  articles."  ^^ 

In  the  main  case,  the  suit  is  not  stayed  because  the 
judges  agree  that  the  disputes  alleged  are  not  within 
the  meaning  of  the  articles  hecause  they  do  not  relate 
"to  the  carrying  on  of  the  partnership  business."  The 
questions  presented  were  inter  alia  "whether  the  partner- 

**  See   stufly,   ' '  Arbitration   as  a   Condition  Precedent, ' '   Harvard 
Law  Review,  Vol.  11,  p.  234. 
"•L.  R.  14  Ch.  D.  200. 
'"Ibid.,  p.  203.     Italics  ours. 


INTERPRETATION  OF  SCOTT  V.  AVERY     203 

ship  has  been  dissolved  and  the  Plaintiff  has  sold  his 
share"  and  whether  certain  other  shares  were  "purchased, 
not  for  the  benefit  of  the  partnership,  but  for  the  benefit 
of  the  Plaintiff  and  the  Defendant,"  Yet  Jessel  says:°^ 
"Of  course  persons  can  agree  to  refer  to  arbitration  not 
merely  disputes  between  them,  htit  even  the  question 
whether  the  disputes  between  them  are  within  the  arhi- 
tration  clause."  ^- 

In  Collins  v.  Locke  ^^  (1879),  Sir  Montague  Smith,  de- 
livering the  judgment  of  the  House  of  Lords,  says :  ' '  The 
question  so  raised  is,  whether  the  general  arbitration 
clause  (clause  11)  affords  an  answer  to  the  action,  there 
having  been  no  arbitration  and  no  award  under  it.  Since 
the  case  of  Scott  v.  Avery,  in  the  House  of  Lords,  the 
contention  that  such  a  clause  is  had  as  an  attempt  to  oust 
the  Courts  of  jurisdiction  may  he  passed  hy.  .  .  .  That 
question  must  be  determined  in  each  case  by  the  construc- 
tion of  the  particular  contract,  and  the  intention  of  the 
parties  to  be  collected  from  its  language. ' '  ^* 

In  1885,  in  the  House  of  Lords  (Spackman  v.  Plum- 
stead  Board  of  Works^^),  a  clause  making  the  engineer 
of  the  Metropolitan  Board  of  Public  Works  the  sole  ar- 
bitrator under  a  building  contract  is  sustained  upon  the 
principle  that  ever  since  Scott  v.  Avery,  parties  may  pro- 
vide any  method  they  choose  for  making  it  ''part  of  the 
contract  itself  that  the  right  of  action,  so  to  say,  hefore 
it  could  arise  was  to  he  ascertained  hy  the  decision  of 
arbitrators;  in  which  the  right  itself,  the  constitution  of 
the  right,  was  not  to  he  perfect  and  absolute  under  the 
contract  until  arbitrators  had  decided  something"  and 
that  the  Court  had  held  in  Scoti  v.  Avery  ''that  to  he 

*^  Ibid.,  p.  208. 

•*  Italics  ours. 

»'L.  R.  4  App.  Cas.  674. 

"  Ihid.,  p.  689.  Italics  ours. 

"  L.  R.  10  App.  Cas.  229. 


204  COMMERCIAL  ARBITRATION 

perfectly  good,  and  that  in  that  case,  until  such  a  decision 
had  been  made,  no  right  upon  which  an  action  could 
he  foimded  arose."  °^ 

The  rule  as  put  by  ]\Iaule,  J.,  in  Scott  v.  Avery,  in  the 
Court  below"'  is  frequently  quoted:  "There  is  no  de- 
cision which  prevents  two  persons  from  agreeing  that  a 
sum  of  money  shall  be  paid  upon  a  contingency;  but 
they  cannot  legally  agree,  that,  when  it  is  payable,  no 
action  shall  be  maintained  for  it." 

In  1887,  in  Viney  v.  Bignold,^^  the  clause  under  review 
was:  "If  any  difference  shall  arise  in  the  adjustment 
of  a  loss,  the  amount  (if  any)  to  be  paid  by  the  society 
shall,  whether  the  right  to  recover  on  the  policy  be  dis- 
puted or  not,  and  independently  of  all  other  questions, 
be  submitted  to  the  arbitration  of  some  person  to  be 
chosen  by  both  parties,"  (or  two,  with  an  umpire  in 
the  usual  fashion)  "and  the  award  of  the  arbitrators  or 
umpire  (as  the  case  may  be)  shall  be  conclusive  evidence 
of  the  amount  of  the  loss,  and  the  party  insured  shall 
not  be  entitled  to  commence  or  maintain  any  action  at 
law  or  suit  in  equity  upon  his  policy  until  the  amount 
of  the  loss  shall  have  been  referred  and  determined  as 
hereinbefore  provided,  and  then  only  for  the  amount  so 
awarded  .  .  .  and  the  reference  in  all  other  respects  to  he 
subject  to  such  rules  and  conditions  as  are  usually  inserted 
in  orders  of  reference  at  nisi  prius  if  the  parties  differ 
about  the  same." 

The  covenant  is  sustained.  The  courts  are  now  turn- 
ing from  the  narrow  construction  of  Scott  v.  Avery. 

•'L.  R.  10  App.  Cas.  229,  at  p.  236.     Italics  ours. 

•"  8  Exch.  Rep.  487,  at  p.  499. 

"L.  K.  20  Q.  B.  D,  172.     Italics  ours. 


eHAPTER  XVI 

THE  JUDICIAL  CORRECTION  OF  A  JUDICIAL  ERROR 
(ENGLAND,  1853-1916) 

If  now  we  spread  upon  the  table  the  various  leading 
eases  we  have  been  examining,  we  shall  find  it  practicable 
to  set  down  certain  definitive  points  as  the  culmination 
of  the  precedents. 

1.  Lord  Chancellor  Cranworth  and  Lord  Campbell,  in 
Scott  V.  Avery  (1855-1856),  Lord  Chancellor  Sugden  in 
Dimsdale  v.  Robertson  (1840),  Lord  Eldon  in  Waters  v. 
Taylor  (1807-8)  and  in  Harcourt  v.  Ramshottom  (1820), 
Lord  Kenyon  in  Half  hide  v.  Fenning  (1788),  Baron  Jef- 
freys in  Norton  v.  Mascall  (1685),  Sir  Henry  Montague 
in  Browne  v.  Downing  (1620),  Yelverton  and  Laken  in 
8  Edw.  IV,  9  and  10  (1468),  the  entire  bench  in  Erode  v. 
de  Ripple  (1375),  the  entire  bench  in  1389  and  the  Judges 
during  the  reign  of  Henry  III  (1216-1272)  all  agree  upon 
what  may  now  be  paraphrased  as  follows: 

"Mutual  promise  to  abide  by  the  award  of  certain  men 
is  good  enough  to  bind  them  to  abide  by  the  agreement;" 
...  "it  is  fit  that  the  same  should  be  performed."  If 
either  revokes,  he  has  done  something  "bad  in  equity." 
"Public  policy  requires  that  effect  should  be  given  to  such 
contracts,"  and  that  the  parties  should  be  left  "at  full 
liberty  to  refer  their  disputes  at  pleasure  to  public  or 
private  tribunals."  Parties  may  select  any  means  they 
choose  for  determining  upon  what  basis  they  shall  release 
each  other,  or  what  shall  be  due  one  from  the  other,  and 
arbitration  is  a  convenient,  inexpensive  and  desirable 
means  for  accomplishing  such  a  result.     He  who  cancels 

205 


S06  COMMERCIAL  ARBITRATION 

his  obligation  so  to  arbitrate  is  guilty  of  inequity  and 
is  not  deserving  of  the  aid  of  a  court  of  equity. 

2.  The  dictum  in  Vynior's  Case  that  submission  or 
agreement  to  arbitrate  is  revocable  at  any  time  has  dis- 
appeared. Like  an  old  scar  disappearing  under  a  new 
skin,  it  is  covered  with  a  new  doctrine — i.e.  that  contracts 
which  oust  the  courts  of  jurisdiction  are  void,  as  against 
public  policy.  Under  this  doctrine,  no  actual  revocation 
need  be  made;  no  formal  instrument  equivalent  in  value 
to  the  original  grant  need  be  executed,  and  actual  no- 
tice of  revocation  to  the  arbitrator  becomes  unnecessary. 
If  the  plaintiff  brings  suit,  it  is  no  defense  that  an  ar- 
bitrament is  pending  or  has  been  agreed  to — even  if  the 
consent  be  followed  by  an  order  of  the  court. 

This  is  the  result  of  Hide  v.  Petit  (1670),  Kill  v.  Hol- 
lister  (1746),  3Iilne  v.  Gratrix  (1806),  King  v.  Joseph 
(1814).  Out  of  all  these  cases,  however,  but  one  rests 
squarely  upon  the  doctrine  of  "ousting  the  courts  of 
jurisdiction"  and  this  is  Kill  v.  Hollister  (directly  over- 
ruled in  Halfhide  v.  Fenning). 

3.  It  is  impossible  to  reconcile  Kill  v.  Hollister,  Hide 
V.  Petit,  Milne  v.  Gratrix  or  King  v.  Joseph  with  the  prin- 
ciples and  decisions  we  have  set  down  in  Proposition  First 
{supra). 

4.  To  resolve  this  dilemma  we  must  conclude  that,  so 
far  as  precedential  value  is  concerned,  by  1856  Scott  v. 
Avery  (1855-1856)  in  the  House  of  Lords  by  Lords  Cran- 
worth  and  Campbell,  Dimsdale  v.  Bohertson  (1840)  in 
Chancery  by  Lord  Sugden,  Waters  v.  Taylor  (1807-8)  and 
Harcourt  v.  Ramshottom  (1820)  by  Lord  Eldon  had  over- 
ruled Milne  v.  Gratrix  (1806),  King  v.  Joseph  (1814), 
Hide  V.  Petit  (1670),  and  Kill  v.  Hollister  (1746).  And 
so  far  as  Vynior's  Case  is  concerned,  the  dictum  of  rev- 
ocability  was  not  only  destroyed  in  authority  by  these 
cases,  but  was  long  before  then  destroyed  by  Norton  v. 
Mascall  (1685)  and  Bromie  v.  Downing  (1620). 


CORPECTION  OF  A  JUDICIAL  ERROR    207 

5.  Though  in  Scott  v.  Avery  all  concur  that  "to  oust 
the  court  of  jurisdiction"  is  against  public  policy,  the 
ratio  decidendi  is  that  it  is  sound  policy  to  agree  not 
to  resort  to  the  courts  of  law  or  equity  if  the  parties  can 
find  some  other  way  out,  and  they  may  agree  that  until 
the  determination  of  the  claims  of  the  parties  is  made 
by  arbitration — even  though  this  determination  in  effect 
finally  adjudicates  and  determines  the  rights  of  the  par- 
ties— no  resort  to  the  courts  shall  be  had. 

6.  Referring  now  to  another  proposition — never  ques- 
tioned throughout  all  the  decisions,  viz:  that  the  award 
of  the  arbitrators,  tvhen  made,  is  binding  unless  it  can 
be  set  aside  for  "matter  of  equity"  (see  Price  v.  Williams  ^ 
— the  case  in  which  Lord  Eldon  was  counsel) — we  come 
to  this  practical  result:  //  the  parties  agree  to  resort 
to  arbitration  they  should  go  to  arbitration.  If  they  do  so, 
the  courts  will  not  set  aside  the  award,  save  upon  grounds 
of  equity.  Therefore,  the  sole  question  in  each  case  (re- 
gardless of  the  particular  words  of  the  contract)  comes 
down  to  this :  Have  the  parties  indicated  that  they  desire 
— in  Lord  Eldon' s  words,  "are  anxious" — that  resort  to  the 
courts  shall  not  he  had  until  the  private  tribunal  they  have 
selected  has  had  opportunity  to  pass  upon  the  matter? 

We  submit  that  this  is  the  clear  and  binding  result  of  the 
decision  in  Scott  v.  Avery,  and  of  Waters  v.  Taylor,  and 
that  all  other  constructions  of  these  decisions  have  been 
due  to  misunderstanding  of  their  effect  upon  the  pre- 
ceding authorities. 

We  have  now  pictured  the  confused  state  of  English 
law  upon  this  subject  down  to  1892.  Is  it  to  be  wondered 
at  that  American  lawyers  and  American  judges  should 
have  found  it  difficult  to  believe  either  that  the  dictum 
in  Vynior's  Case  was  no  longer  English  law,  or  that  Half- 
hide  V.  Penning  was  authority,  and  more  difficult  still 
to  determine  whether  the  Cranworth-Camphell  version  of 

^  Supra. 


208  COMMERCIAL  ARBITRATION 

Scott  V.  Avert/  was  to  be  taken  rather  than  the  Bramwell- 
Esher  version.  Like  earnest  adherents  to  the  faith,  Amer- 
ican judges  asked  only  for  authoritative  versions  of  the 
book.  The  high  priests  at  the  Bar  presented  late  edi- 
tions, but  conflicting  in  chapter,  verse  and  text.  No  cita- 
tion of  English  cases  prior  to  1892  which  did  not  give 
all  the  cases  and  arrange  them  historically  could,  as  we 
now  see  it,  be  treated  as  trustworthy. 

But  in  1892  a  change  came  about — not  by  act  of  Par- 
liament, but  through  the  clear  analysis  of  English  judges 
themselves.  At  last  the  error  became  visible  and  was  cor- 
rected. 

In  1894  we  come  to  the  case  of  Hamlyn  &  Co.  v.  Talisker 
Distillery  in  the  House  of  Lords  (where  sit  Lord  Chan- 
cellor Ilerschell,  Lord  "Watson,  Lord  Ashbourne,  Lord 
Macnaghten,  Lord  Morris  and  Lord  Shand).^  Here  is  a 
contract  between  an  English  and  a  Scotch  firm  containing 
this  clause:  "Should  any  dispute  arise  out  of  this  con- 
tract, the  same  to  he  settled  hy  arhitration  hy  two  mem- 
hers  of  the  London  Corn  Exchange,  or  their  umpire,  in 
the  usual  way.'*  "Was  this  a  valid  clause?  The  appeal 
comes  up  from  Scotland.  The  Scotch  judges  had  held 
that  the  contract  was  to  be  governed  by  the  laws  of  Scot- 
land and  that  as  Scotch  law  then  stood,  such  a  clause 
was  invalid,  for  that  no  arbitrator  was  named  in  the  con- 
tract. In  answer,  the  contention  was  made  first  of  all 
that  the  parties  intended  this  to  be  governed  by  English 
law.  (The  argument  is  referred  to  later.)  And  so  the 
Court  decides.  In  the  second  place,  it  is  argued  that 
by  the  law  of  England,  such  a  clause  is  valid — not  rev- 
ocable. Does  Coke's  dictum  finally  prevail,  or  is  it  Half- 
hide  V.  Penning  and  Cranworth's  rule  in  Scott  v.  Avery? 

The  Court  holds  most  decisively  that  under  the  law  of 
England  such  a  clause  is  valid.  Watson,  Lord,  says :  * '  The 
jurisdiction  of  the  Court   is  not  wholly  ousted  by  such 

*21  Session  Cases  (4th  Series)  21. 


CORRECTION  OF  A  JUDICIAL  ERROR    209 

a  contract.  It  deprives  the  Court  of  jurisdiction  to  in- 
quire into  and  decide  the  merits  of  the  case,  while  it 
leaves  the  Court  free  to  entertain  the  suit,  and  to  pro- 
nounce a  decree  in  conformity  with  the  award  of  the  ar- 
biter. Should  the  arbitration  from  any  cause  prove  abor- 
tive, the  full  jurisdiction  of  the  Court  will  revive,  to  the 
effect  of  enabling  it  to  hear  and  determine  the  action  upon 
its  merits.  "When  a  binding  reference  is  pleaded  in  limine, 
the  proper  course  to  take  is  either  to  refer  the  question 
in  dispute  to  the  arbiter  named  or  to  stay  procedure  until 
it  has  been  settled  by  arbitration."  ^ 

Two  years  earlier  (1892)  in  the  House  of  Lords,  in 
Caledonian  Insurance  Co.  v.  Gilmour*  there  had  come  up 
for  review  a  clause  in  which  it  was  provided  that  any 
difference  as  to  the  amount  of  loss  or  damage  should  te 
referred  to  arbitration  and  no  suit  at  law  should  be  begun 
until  the  arbitrators  made  their  award.  No  arbitrators 
were  named.  Here,  too,  it  had  been  argued  that,  as  the 
Scotch  law  then  stood,  such  a  clause  was  void  and  it  was 
argued  further  that  as  the  case  had  arisen  in  Scotland, 
the  Scotch  law  should  be  applied.  But  by  this  time  the 
lawyers  in  the  House  of  Lords  understand  clearly  the  ef- 
fect of  Scott  V.  Avery.  Lord  Herschell  (Lord  Chancellor) 
says:  "I  may  add  that  the  reasoning  of  the  noble  and 
learned  Lords  who  took  part  in  the  decision  of  Scott  v. 
Avery  appears  to  me  completely  applicable  to  the  present 
case.  Its  cogency  is  not  affected  by  o^iy  of  the  distinc- 
tions which  then  existed  between  the  law  of  England  and 
that  of  Scotland  in  relation  to  arbitration  clauses.''  ^  And 
Lord  Watson  says:^  "Upon  the  question  whether  a  ref- 
erence like  the  present,  by  reason  of  its  possibly  devolving 
upon  the  arbiters  the  decision  of  the  matters  specified 

'Ihid.,  p.  25. 

*L.  R.  [1893]  App.  Cas.  85. 
'^Ibid.,  p.  90.     Italics  ours. 
•  Thid.,  p.  96. 


210  COMMERCIAL  ARBITRATION 

.  .  .  becomes  obnoxious  to  the  charge  of  invading  the 
jurisdiction  of  Her  Majesty's  Courts,  the  judgment  of  this 
House  in  Scott  v.  Avery  is  a  direct  authority.  No  doubt 
the  judgment  was  given  in  an  English  suit;  but  that  cir- 
cumstance does  not  detract  from  its  weight,  because,  until 
modified  by  comparatively  recent  legislation,  the  law  of 
England  went  beyond  that  of  Scotland,  and  held  that 
no  agreement  to  refer  future  disputes  to  arbitrators,  wheth- 
er named  or  not  named,  could  oust  the  jurisdiction  of  the 
Courts  or  disable  either  of  the  contracting  parties  from 
resorting  to  them. ' '  ^  Since  the  terms  of  the  policy  in 
Scott  V.  Avery  are  "substantially  the  same  with  those 
which  occur  in  the  policy"  in  the  case  at  bar,  he  can 
find  no  distinction.  He  quotes  freely  from  Lord  Camp- 
bell's opinion  in  Scott  v.  Avery  and  says  "the  main  ground 
of  judgment  is  expressed  by  him  in  these  terms  (1)  : 
'Now,  in  this  contract  it  is  stipulated,  in  the  most  ex- 
press terms,  that  until  the  arbitrators  have  determined, 
no  action  shall  lie  in  any  Court  whatever.  That  is  not 
ousting  the  Court  of  their  jurisdiction,  hecause  they  have 
no  jurisdiction  whatsoever,  and  no  cause  of  action  ac- 
crues until  the  arbitrators  have  determined.'  " '' 

In  the  same  year  (1892)  also,  Lord  Coleridge  in  the 
Queen's  Bench  Division  in  Trainor  v.  Phoenix  Fire  As- 
surance Company^  had  said,®  the  "old  doctrine  that  you 
could  not  oust  the  jurisdiction  of  the  court  by  an  agree- 
ment to  refer  everything,  even  to  refer  the  cause  of  action 
itself,"  was  overruled  in  Scott  v.  Avery.  "Whether  that 
(the  "old  doctrine")  was  a  wise  holding  of  the  law  is 
not  for  me  to  say.  Judges  of  great  authority  have  in 
the  course  of  their  judgments  thrown  considerable  doubt 
on  the  judgment  of  the  Lords  in  that  respect,"     Again 

*  Italics  ours. 
•65  L.  T.  R.  825. 

•  He  was  then  70  years  old ;  he  died  two  years  later.  See  Ency- 
clopaedia Britannica,  11th  Ed.,  Vol.  6,  j).  677,  art.  "Coleridge." 


CORRECTION  OF  A  JUDICIAL  ERROR    211 

he  says:  "Lord  Cranworth,  who  is  no  mean  authority, 
as  well  as  that  very  great  authority  Lord  Campbell,  both 
said  in  terms  that  in  their  judgment  it  did  not  make 
the  slightest  difference  whether  it  did  refer  other  things 
or  not,  because  if  it  did  refer  other  matters  it  was  equally 
good.  Therefore  Scott  v.  Avery,"  now  says  Lord  Cole- 
ridge, "is  a  case  to  show  not  that  the  jurisdiction  of  the 
courts  has  been  or  can  be  ousted,  as  has  been  some- 
times suggested,  but  that  you  do  not  oust  the  jurisdiction 
of  the  court,  and  do  not  come  within  the  authority  of 
the  earlier  cases  .  .  .  because  you  refer  the  question  of 
liability,  as  well  as  the  question  of  amount;  and  one  of 
the  judges,^"  I  think  in  the  Exchequer  Chamber,  certainly 
in  the  House  of  Lords,  points  out  that  for  the  ascertain- 
ment of  the  amount  of  liability  it  must  often  be  essential 
to  go  into  the  principal  question  of  liability  itself,  and 
to  ascertain  not  only  whether  the  liability  exists  to  any 
extent,  but  also  whether  it  exists  at  all,  and,  although  that 
must  be  so  in  many  cases,  nevertheless  it  has  never  been 
suggested  that  the  jurisdiction  of  the  courts  was  ousted."  ^^ 
And  then  His  Lordship  makes  this  acute  comment  upon 
the  cases  between  1855  and  1892  which  we  have  been 
studying : 

"7  ain  perfectly  aware  that  it  often  happens  that  when 
strong  judges  do  not  like  a  decision  they  give  judgments 
limiting  the  effect  of  the  decision,  and  as  mu^h  as  pos- 
sible minimising  the  alteration  of  the  law,  if  alteration 
of  the  law  there  be."'^^  How  true  this  was!  "Now  that, 
I  take  it,"  says  he  (becoming  more  specific),  "is  really 
the  substance  of  the  reason  of  the  judgments  in  Edwards 
V.  The  Aberayron  Company}^  My  learned  brother,  the 
Master  of  the  Rolls,  goes  the  full  length  of  suggesting  that 

»«)See  ante,  p.  174. 

"  Italics  ours. 

"  Italics  ours. 

"34  L.  T.  E.  457;  L.  E.  1  Q.  B.  D.  563. 


212  COMMERCIAL  ARBITRATION 

the  House  of  Lords  did  not  hold,  and  would  have  been 
wrong  if  it  had  held,  that  a  submission  to  arbitration  of 
all  matters  in  dispute  would  be  a  good  condition  precedent 
to  the  maintenance  of  an  action  on  any  of  them." '^^ 
"But,"  says  Coleridge,  "he  stood  alone  in  that  respect" 
— which  is  a  little  unfair  to  the  learned  Master  of  Rolls, 
because,  as  we  have  seen,  he  did  have  company  in  "lim- 
iting the  effect"  of  Scott  v.  Avery;  Kelly,  C.  B.,  stood  with 
him  in  that  case  and  in  other  cases.  Lord  Coleridge  him- 
self had  adopted  Bram well's  explanation  of  Scott  v.  Av- 
ery}^ But  my  Lord  Coleridge 's  ripe  judgment  ^^  condemns 
only  such  clauses  as  these:  ''we  agree  that  no  cause  of 
action  under  any  circumstances  shall  arise  upon  this  pol- 
icy with  which  the  courts  sJuill  deal,"  or  ''under  no  cir- 
cumstances shall  the  courts  of  law  have  anything  to  do 
with  disputes  arising  under  this  clause."  Such  clauses 
would  be  void,  because  they  would  "close  the  doors  under 
all  circumstances,  and  under  every  conceivable  state  of 
the  case."  And  so  it  is  held  clearly  that,  under  Scott 
V.  Avery,  the  very  liability  itself  may  be  determined  by 
arbitration  and  the  determination  of  arbitrators  in  such 
a  case  is  a  condition  precedent  to  any  application  to  the 
courts. 

Coleridge  does  not  rest  his  view,  it  will  be  observed, 
upon  the  Arbitration  Act  of  1889 — he  does  not  even  refer 
to  the  statute  law.  Collins,  J.,  his  colleague,  does  refer 
to  it  as  indicating  that  because  at  Common  Law  there  was 
no  existing  means  of  effectuating  arbitration  covenants, 
the  Legislature  had  said,  "We  will  enable  a  judge  to  com- 

"  Italics  ours. 

"  Dawson  v.  Fitsgerald,  ante,  p.   195. 

*" '  On  the  whole,  he  was  not  so  strong  a  man  in  his  jutlicial  ca- 
pacity as  Campbell  or  Cockburn;  but  it  must  be  admitted  that  his 
scholarship,  his  refinement,  his  power  of  authority,  and  his  character 
raised  the  tone  of  the  bench,  wliile  he  sat  upon  it,  and  that  if  it  haa 
been  adorned  by  greater  judicial  abilities,  it  has  hardly  ever  known 
a  greater  combination  of  varied  merits. ' '  Encyclopaedia  Britannica, 
11th  Ed.,  Vol.  6,  p.  677. 


CORRECTION  OF  A  JUDICIAL  ERROR     213 

pel  a  party  under  such  a  contract,  although  he  now  re- 
fuses to  carry  it  out,  to  Iioajc  the  question  not  simply  of 
liability,  hut  the  amount,  or  whatever  comes  within  the 
contract,  decided,  not  by  the  tribunals  of  the  country,  but 
by  a  private  tribunal,  namely,  arbitration/'  ^''  "How  can 
it  be  said  that  it  is  contrary  to  public  policy  that  private 
tribunals  should  determine  the  question  of  liability?"  asks 
Collins,  when  ' '  the  attitude  of  the  Legislature  towards  pri- 
vate tribunals"  is  to  give  "power  to  a  judge  to  compel 
the  parties  to  an  agreement  to  oust  the  jurisdiction  of 
the  Superior  Court."  He  says  further  (concerning  the 
Arbitration  Act  of  1889):  "That  clause,  as  I  under- 
stand it,  being  merely  a  re-enactment  of  the  old  section 
of  the  Common  Law  Procedure  Act,  was  meant  to  meet 
the  difficulty  where,  there  being  a  cause  of  action,  the 
parties  had  agreed  that  the  cause  of  action  should  be 
ascertained  by  arbitration.  In  that  state  of  facts,  there 
was  no  means,  at  Common  Law  at  all  events,  whereby  the 
parties  could  be  made  to  carry  out  their  agreement,  and 
try  by  private  tribunal  instead  of  trying  by  the  courts, 
and  therefore  discretion  was  given  to  the  judge  to  in- 
terfere and  stay."  In  other  words,  as  the  judges  now 
understand  it,  the  arbitration  covenant  was  not  a  nullity 
— it  was  merely  unenforceable  by  specific  performance. 
The  Act  of  1889  did  not  change  the  right.  It  merely  ex- 
tended the  remedy.  The  failure  to  apply  the  remedy  of 
specific  performance  was  judicial  error.  If  Baron  Jef- 
freys and  Sir  Henry  Montague  had  been  followed  in- 
stead of  Lord  Coke,  no  such  difficulty  would  have  arisen. 
In  1892  also  the  Court  of  Appeal  (Lord  Esber,  M.R., 
Fry  and  Lopes,  JJ.)  in  Scott  v.  Mercantile  Accident  and 
Guarantee  Insurance  Co}^  had  held  valid  a  clause  read- 
ing: "If  any  dispute  or  difference  shall  arise  between 
the  assured,  or  any  claimant  under  this  policy,  and  the 

"Baron  Jeffreys'  doctrine  is  at  last  vindicated.     Ante,  p.  135. 
'»66  L.  T.  R.  811. 


214  COMMERCIAL  ARBITRATION 

company  as  to  any  claim  for  loss  or  any  other  claim  against 
the  campany,  or  in  any  way  relating  to  or  arising  out 
of  this  policy,  all  such  disputes  or  differences  shall  be  re- 
ferred to  the  decision  of  an  arbitrator  to  be  appointed 
by  the  parties  .  .  .  and  any  such  arbitration  in  England 
may  be  made  a  rule  of  court  and  the  company  shall  not 
he  liahle  in  respect  of  any  claim  for  loss,  or  for  any  act, 
neglect,  or  default  in  the  execution  of  any  of  the  powers 
and  authorities  given  to  it  hy  the  policy  or  otherwise, 
unless  and  until  the  liability  of  the  company  and  the 
amount  thereof,  if  not  admitted,  shall  have  been  deter- 
mined by  such  arbitrator,  arbitrators,  or  umpire,  whose 
award  thereon  shall  be  a  condition  precedent  to  any  li- 
ability of  the  company  or  any  right  of  action  against  the 
company  in  respect  of  such  claim,  and  the  award  only 
shall  he  sued  upon." 

Now  Lord  Esher  says:  ''The  effect  of  the  clause  in 
this  policy  is  governed  by  the  decision  in  Scott  v.  Avery, 
and  arbitration  is  a  condition  precedent  to  the  plaintiff's 
right  of  action,"  thus  clearly  reversing  his  dictum  in 
Edwards  v.  Aherayron  Mutual  Ship  Ins.  Society, '^^  as 
(1892)  Lord  Coleridge  pointed  out  in  Trainor  v.  Phoenix 
Fire  Assurance  Co.  and  Holmes,  L.J.,  pointed  out  in  1907 
in  Gaw  v.  British  Law  Fire  Insurance  Co."^^ 

In  1897,  in  a  case  in  the  Queen's  Bench  Division,^^  the 
contract  for  the  employment  of  the  plaintiff  for  five  years 
contained  a  provision  that  "if  at  any  time  any  dispute, 
difference,  or  question  should  arise  between  the  defendants 
and  the  plaintiff'  touching  their  or  his  rights  or  liabili- 
ties under  the  agreement  or  otherwise  ...  it  should  be 
referred  to  the  President  for  the  time  being  of  the  In- 
stitute of  Civil  Engineers,  or  to  such  other  person  as  they 

"Jnie,  pp.    192-194. 
""See  post,  p.  219. 

'^  Eenshaw  v.  Queen  Anne  Mansions  Co.,  L.  R.  [1897]  1  Q.  B.  D. 
662. 


CORRECTION  OF  A  JUDICIAL  ERROR     215 

should  agree  on  as  sole  arbitrator.  ..."  Although  this 
is  on  all  fours  with  Davis  v.  Starr  -•  and  should  have  been 
controlled  by  it,  Lord  Esher  attempts  to  distinguish  the 
cases,  asserting  "that  the  defendant  there  was  not  ready 
and  willing  to  submit  the  whole  matter  to  arbitration,  but 
was  only  ready  and  willing  to  refer  the  asses.sment  of 
damages."     lie  observes: 

"I  cannot  see  any  ground  for  the  contention  that  by 
the  dismissal  of  the  plaintiff  the  whole  contract  was  put 
an  end  to  so  as  to  be  no  longer  existing.  The  question 
was  whether  the  dismissal  of  the  plaintiff  was  a  breach 
of  the  contract  by  the  defendants,  and,  by  virtue  of  the 
provision  for  reference  of  any  dispute  to  arbitration  con- 
tained in  the  contract,  I  think  the  judge  had  power  to 
make  the  order  (of  stay).  .  .  ."^^  Chitty,  J.,  concurs: 
"As  I  read  the  case  (of  Davis  v.  Starr),  the  view  on 
which  the  Court  really  acted  was  that  the  defendant  was 
only  ready  and  willing  to  refer  some  part  of  the  dispute, 
and  not  the  whole."  ^^ 

But  in  Davis  v.  Starr  it  is  clear  that  the  court  rested 
its  decision  upon  two  grounds,  one  of  which  was,  that  the 
plaintiff's  dismissal  of  the  defendant  put  the  whole  con- 
tract into  question. 

In  the  last  decade  of  the  century,  we  find  that  under  a 
general  provision  in  articles  of  copartnership  for  arbitra- 
tion of  all  matters  in  difference  between  them  an  arbi- 
trator has  power  even  to  award  a  dissolution  of  the  part- 
nership.^^ 

In  Belcher  v.  Boedean  School  Site  and  Buildings  Lim~ 

*«L.  R.  41  Ch.  D.  242. 

**  Italics  ours. 

**  Italics  ours. 

"'Walmsley  v.  White,  40  W.  R.  675  (1892),  reversing  Joplin  v. 
Postlethwaite,  61  L.  T.  E.  629  and  following  Eussell  v.  Bussell,  L.  R. 
14  Ch.  D.  471,  28  W.  R.  Dig.  154;  Vmvdretj  v.  Simpson  (1895),  per 
Chitty,  J.,  65  L.  J.  (Ch.)  369,  L.  E.  [1896]  1  Ch.  167,  44  W.  E.  123; 
Belfield  v.  Bourne  (1894),  8  E.  61  (1894),  L.  E.  [1894]  1  Ch.  521,  63 
L.  J.  (Ch.)   104. 


^16  COMMERCIAL  ARBITRATION 

ited  -*  decided  in  the  Court  of  Appeal,  the  arbitrator  is 
the  architect  for  one  of  the  parties.  Collins,  ]M.R.,  says: 
"It  is  nothing  unusual  for  the  parties  to  a  building  con- 
tract knowingly  to  submit  their  differences  to  an  arbi- 
trator who  is  not,  and  is  not  expected  to  be,  absolutely 
unbiassed.  In  these  cases,  where  the  builders  dispute  what 
the  architect  has  done,  they  will  ex  JnjpotJied  think  that 
the  architect  is  in  the  wrong,  and,  perhaps,  so  grossly 
wrong,  as  to  be  even  fraudulent.  But  is  the  mere  fact 
of  such  a  dispute  to  be  allowed  to  rescind  the  terms  of 
the  agreement,  and  oust  the  jurisdiction  of  the  architect, 
the  arbitrator  agreed  on  hy  the  parties?  Certainly  not."  " 
Now,  observe,  it  is  the  jurisdiction  of  the  arbitrator  which 
is  not  to  be  ousted  by  the  courts.  ' '  Can  one  of  two  parties, 
by  making  the  most  injurious  charges  against  the  arbi- 
trator, charges  which  in  this  case  .  .  .  are  founded  on 
very  scanty  materials,  at  once  oust  his  jurisdiction?"  ^^ 
' '  To  hold  that, ' '  says  the  Master  of  the  Rolls,  ' '  would  open 
a  wide  door  for  all  sorts  of  attempts  to  get  rid  of  arbi- 
trators deliberately  chosen  by  the  parties  to  contracts,  and 
to  avoid  stipulations  for  the  prompt  decision  of  disputes 
by  named  persons  chosen  because  they  are  instructed  and 
informed,  on  whose  decision  one  party  is  entitled  to  insist, 
and  to  whose  decision  the  other  is  bound  to  submit,  unless 
he  can  show  some  real  bias  on  the  part  of  the  arbitrator 
which  was  not  contemplated  when  he  was  chosen." 

So  also  in  1893,  in  Jackson  v.  Barry  Railway  Co.^^  Lord 
Chancellor  Bowen  had  said:  "It  is  no  part  of  our  duty 
to  approach  such  curiously-coloured  contracts  with  a  de- 
sire to  upset  them  or  to  emancipate  the  contractor  from 
the  burden  of  a  stipulation  which,  however  onerous,  it  was 
worth  his  while  to  agree  to  bear.    To  do  so,  would  be  to 

"85  L.  T.  E.  468  (1901). 

"Ibid.,  p.  471.     Italics  ours. 

*•  Italics  ours. 

»L.  R.  [1893]  1  Ch.  D.  238,  at  p.  247. 


CORRECTION  OF  A  JUDICIAL  ERROR     217 

attempt  to  dictate  to  the  commercial  world  the  conditions 
under  which  it  should  carry  on  its  business." 

In  1902,  in  the  House  of  Lords,  in  Spurrier  et  al.  v.  La 
Cloche,^^  a  Jersey  fire  policy  contained  an  arbitration 
clause.  The  Court  held  that  whether  it  were  treated  as 
an  English  contract  or  as  a  Jersey  contract  the  arbitra- 
tion clause  was  valid.  "That  the  intention  of  the  parties 
to  a  contract  is  the  true  criterion  by  which  to  determine 
by  what  law  it  is  to  be  governed  is  too  clear  for  contro- 
versy" (citing  Hamlyn  &  Co.  v.  Talisker  Distillery  Co.) 
but  in  Jersey  as  well  as  in  England,  Scott  v.  Avery  is 
now  controlling  and  the  Court  repeats  with  approval  the 
observation  of  Maule,  J.,  to  which  we  have  already  re- 
ferred, **  There  is  no  decision  which  prevents  two  persons 
from  agreeing  that  a  sum  of  money  shall  be  payable  on 
a  contingency;  but  they  cannot  legally  agree  that  when 
it  is  payable  no  action  shall  be  maintained  for  it." 

In  1903,^^  there  comes  up  a  policy  of  insurance  which 
provides  that  '^all  the  parties  interested  expressly  agree 
to  submit  to  the  jurisdiction  of  the  Courts  having  jurisdic- 
tion in  such  matters  of  Budapest."  It  is  held  in  King's 
Bench  that  this  was  a  submission  to  arbitration,  binding 
upon  the  courts  of  England,  following  Law  v.  Garrett  and 
Hamlyn  &  Co.  v.  Talisker  Distillery.  Romer,  L.  J.,  says: 
"  It  is  not  as  if  the  insurance  company  alone  merely  agreed 
to  submit  themselves  to  the  jurisdiction  of  the  Courts  at 
Budapest.  Here  both  the  parties  to  the  contract  have  mutu- 
ally agreed  to  submit.  If  the  parties,  instead  of  agreeing  to 
submit  all  disputes  that  might  arise  under  the  contract 
to  the  Courts  at  Budapest,  had  agreed  to  submit  them 
to  a  named  arbitrator,  there  could  not  possibly  be  any 
doubt  that  the  person  named  was  the  arbitrator  to  de- 

"Tl  L.  J.  (P.  C.)  101;  L.  R.  [1902]  A.  C.  446;  86  L.  T.  R.  631; 
51  W.  R.  1;   18  T.  L.  R.  606. 

"  Atistrian-Lloyd  Steams-hip  Co.  v.  Gresham  Life  Assurance  Society, 
Urn.,  72  L.  J.   (K.  B.)   211. 


218  COIMMERCIAL  ARBITRATION 

eide  any  disputes.  I  think  the  meaning  here  is  the  same."  ^^ 
The  courts  of  England  thus  permit  themselves  to  be  ousted 
of  jurisdiction  by  the  agreement  of  the  parties,  even  by  the 
courts  of  Austria-Hungary. 

In  1907,  in  Gaw  v.  British  Law  Fire  Insurance  Co.,^^ 
Scott  V.  Avery  comes  up  once  more  for  interpretation.  The 
case  illustrates  markedly  with  what  persistence  the  doctrine 
of  revocability  fights  for  its  life  and  how,  somewhere  and 
somehow,  it  regains  a  footing.  Here  the  insurance  com- 
pany argued  that  a  claim  under  a  policy  of  insurance 
was  fraudulent.  The  plaintiff  insisted  that  this  issue, 
like  any  other,  should  go  to  arbitration  under  the  cov- 
enant to  submit  all  differences  to  arbitration.  Mr.  Justice 
Ross,  in  the  court  below,  quotes  and  follows  Mr.  Justice 
Coleridge's  argument  in  Scott  v.  Avery:  "The  Courts 
will  not  enforce  or  sanction  an  agreement  which  deprives 
the  subject  of  that  resource  to  their  jurisdiction,  which 
has  been  considered  a  right  inalienable  even  by  the  con- 
current will  of  the  parties"  and  says:  ''The  right  to 
meet  a  charge  of  fraud  before  the  King's  public  tribu- 
nals is  a  right  that  no  man  can  part  with  against  his 
will."  Judge  Ross  refused  to  apply  Scott  v.  Avery,  say- 
ing, "While  the  decision  of  Scott  v.  Avery  is  accepted  by 
all  Courts,  the  language  of  Lord  Campbell,"  in  his  judg- 
ment, "goes  much  further  than  was  necessary,  and  has 
given  rise  to  a  good  deal  of  misconception  and  confusion. 
It  is  calculated  to  create  an  impression  that  where  an 
agreement  to  refer  all  differences  exists,  accompanied  by 
words  indicating  that  an  award  is  a  condition  precedent 
to  legal  proceedings,  a  party  can  be  forced  before  the 
private  tribunal,  no  matter  what  the  nature  of  the  dif- 
ferences may  be."  But  on  appeal,  Holmes,  L.  J.,  writing 
the  opinion,  says  (concerning  Scott  v.  Avery):  "It  will 
not  be  denied  that  that  decision  legalizes  a  stipulation  in 

"  Italics  ours. 
"[1908]   1   I.  R.  245. 


CORRECTION  OF  A  JUDICIAL  ERROR     219 

a  contract  that  any  difference  as  to  the  amount  of  liabil- 
ity thereunder  is  to  be  referred  to  arbitration,  and  that 
no  action  can  be  maintained  until  the  amount  is  so  settled, 
and  then  only  for  such  sum  as  shall  be  awarded.  Speaking 
for  myself,  however,"  says  he,  "I  have  always  been  of  opin- 
ion that  Scott  V.  Avery  went  farther  than  this,  and  is  an 
authority  that  a  contract  may  legally  provide  that  where 
a  difference  arises  thereu7idcr  relating  to  other  matters 
than  amount,  no  liahility  is  to  arise,  and  no  action  is  to  ie 
maintained  until  the  matter  of  difference  has  ieen  made 
the  subject  of  arbitration  and  award.  This,"  says  the 
learned  judge,  ''has  been  not  only  my  opinion,  hut  is,  I 
think,  the  view  generally  taken  by  lawyers  during  the  last 
forty  years."  ^*  He  quotes  Martin,  B.,  in  Tredwen  v. 
Holman^^  and  disapproves  of  Brett's  dictum  in  Edwards 
V.  Aberayron  Mutual  Ship  Ins.  Society.  He  says:  "Lord 
Esher,  then  Brett,  J.,  distinctly,  and  Kelly,  C.  B.,  with 
more  doubt,  took  the  narrow  view  of  Scott  v.  Avery  on 
which  Mr.  Justice  Ross  has  acted.  It  must,  however,  be 
remembered  that  in  doing  so  they  not  only  differed  from 
the  majority  of  the  Exchequer  Chamber,  but  from  the 
three  judges  of  the  King's  Bench.  The  Aberayron  Case 
has,  as  far  as  I  am  aware,  been  only  referred  to  in  one 
subsequent  English  case,  Traitior  v.  The  Fire  Insurance 
Co.,^^  in  which  Lord  Esher 's  view  of  the  effect  of  Scott 
V.  Avery  was  dissented  from;  and  in  Scott  v.  Mercantile 
Ace.  &  Guarantee  Ins.  Co.  Limited  (see  our  reference 
supra)  Lord  Esher  himself  gave  a  judgment  absolutely 
inconsistent  with  his  dicta  in  the  Aberayron  case."  Lord 
Justice  Holmes  then  quotes  with  approval  Lord  Watson's 
words  in  Caledonian  Ins.  Co.  v.  Gilmour  (which  we  have 
quoted  at  p.  209),  regarding  the  principle  of  Scott  v. 
Avery.    Accordingly,  Judge  Ross  is  reversed.    The  holding 

**  Italics  ours. 
^Ante,  pp.   186-187. 
"'  65  L.  T.  R.  825. 


220  COMMERCIAL  ARBITRATION 

is  that  even  an  issue  of  fraud  must  be  left  to  arbitration. 
And  so  Lord  Cranworth's  intei'pretation  of  Scott  v.  Avery 
is  once  more  made  effective. 

If  we  maj''  trust  the  modern  laborers  on  such  works 
as  "Cases  cited,  distinguished  and  overruled,"  we  can  say 
with  certainty  that  after  1892  Vynior's  Case  is  not  even 
referred  to  hy  an  English  court. 

In  1914  in  Admiralty  a  clause  in  a  bill  of  lading  pro- 
vided that  any  dispute  concerning  the  interpretation  of 
the  bill  of  lading  was  "to  he  decided  in  Hamhurg  accord- 
ing to  German  law."  It  is  clearly  held  that  this  clause 
must  be  treated  as  a  submission  to  arbitration  within  the 
meaning  of  Section  4  of  the  Arbitration  Act,  1889,  and 
that,  although  a  tribunal  at  Hamburg  was  not  specified, 
the  contract  meant  that  disputes  as  to  its  interpretation 
were  to  be  tried  by  the  competent  court  in  Hamburg  and 
in  accordance  with  the  German  law.^^  The  Court  now 
says :  "  In  dealing  with  commercial  documents  of  this  kind, 
effect  must  be  given,  if  the  terms  of  the  contract  permit 
it,  to  the  obvious  intention  and  agreement  of  the  parties. 
I  think  the  parties  clearly  agreed  that  disputes  under 
the  contract  should  be  dealt  with  by  the  German  tribunal, 
and  it  is  right  to  hold  the  plaintiffs  to  their  part  of  the 
agreement.  Moreover,  it  is  probably  more  convenient  and 
much  more  inexpensive,  as  the  disputes  have  to  be  de- 
cided according  to  German  law,  that  they  should  be  de- 
termined in  the  Hamburg  court."  In  this  contract  the 
entire  clause  read:  '^A^iy  disputes  concerning  the  inter- 
pretation of  the  hill  of  lading  are  to  he  decided  in  Ham- 
hurg according  to  German  law."  The  Court  cites  Law 
V.  Garrett  (38  L.  T.  Rep.  3;  8  Ch.  Div.  26),  Austrian 
Lloyd  Steamship  Company  v.  Gresham  Life  Assurance 
Society  Limited  (88  L.  T.  Rep.  6;  (1903)  1  K.  B.  249), 

"The  Cap  Blanco,  83  L.  J.  (P.)  23  (1913);  109  L.  T.  R.  672; 
29  T.  L.  R.  557.  Evana,  P.  Appeal  withdrawn.  See  83  L.  J.  (P.) 
23.   C.  A. 


CORRECTION  OF  A  JUDICIAL  ERROR     §21 

Logan  v.  Bank  of  Scotland  (94  L.  T.  Rep.  153;  (1906)  1 
K,  B.  141),  and  Kirchner  and  Co.  v.  Gruban  (99  L.  T.  Rep. 
932;  (1909)  1  Ch.  413)  that  such  a  clause  is  a  submission 
to  arbitration  within  the  meaning  of  Sect.  4  of  the  Ar- 
bitration Act  of  1889.  "The  tribunal  at  Hamburg  is  not 
specified,  hut  a  fair  business  like  reading  of  the  contract 
means  that  such  disputes  are  to  be  tried  by  the  com- 
petent court  in  Hamburg,  and  in  accordance  ivith  Ger- 
man law.*' 

But  the  old  error  dies  hard.  In  1912  we  find  the 
King's  Bench  Division,  Fletcher  Moulton,  L.  J.,  saying  :^^ 
"Very  early  in  the  history  of  arbitration  there  arose  the 
question  whether  a  party  to  a  contract  containing  an  ar- 
bitration clause  was  precluded  thereby  from  appealing  to  a 
Court  of  law  to  enforce  his  rights  under  the  contract.  The 
answer  which  the  Courts  gave  to  this  question  admits  of  no 
doubt.  They  decided  that  no  provision  in  a  contract  which 
oiisted  the  jurisdiction  of  the  Courts  of  law  could  be 
valid,  but  that  a  clause  agreeing  to  refer  disputes  to  ar- 
bitration was  valid  because  it  did  not  oust  the  jurisdiction 
of  the  Courts.  In  other  words  they  decided  that  the  jw- 
risdiction  of  the  Courts  to  compel  a  defendant  to  appear 
before  them,  and  their  jurisdiction  to  pronounce  finally 
and  conclusively  on  the  rights  of  the  parties  after  ddie 
hearing,  were  left  untouched  by  such  a  clause  .  .  .  or  even 
by  proceedings  having  been  commenced  under  such  a  sub- 
missimi.  Neither  a  general  agreement  to  submit  disputes  to 
arbitration,  nor  the  submission  of  the  dispute  in  question 
to  a  particular  arbitrator,  nor  even  the  pendency  of  an 
arbitration  thereon,  could  be  pleaded  in  answer  to  a  claim 
in  an  action.''  ^*  It  is  inconceivable  that  an  English  judge 
could  so  misstate  the  law.  It  is  like  Judge  Ross's  error 
in  Gaw  v.  British  Law  Fire  Insurance,  or  Lord  Esher's 
in  the  Aberayron  Case.     "When  one  turns  to  the  eases 

"  Doleman  4-  Sons  v.  Ossett  Corporation,  L,  E.  [1912]  3  K.  B.  258. 
'•Italics  ours. 


«22  CO]\BIERCIAL  ARBITRATION 

cited  by  counsel,  one  is  astounded  to  find  neither  Halfkide 
V.  Fenning,  Waters  v.  TayJvr,  Harcourt  v.  Banuhottom, 
Dimsdale  v.  Robertson,  nor,  in  fact,  any  case  later  than 
Smith  and  Service  ^'^  (1890),  except  Pearson  &  Son,  Ltd. 
V.  DuUin  Corp.  (L.  R.  [1907]  A.  C.  351).  Thompson  v. 
Charnock,  Mitchell  v.  Harris  and  Harris  v.  Reynolds  *^  are 
as  far  hack  as  either  counsel  or  Court  cares  to  go. 

In  this  case  the  Court  refuses  to  enforce  an  agreement 
whereby  the  defendant's  engineer  should  determine  any 
question  that  should  arise  in  the  course  of  a  work  of 
construction  "touching  or  concerning  the  works,  or  re- 
lating to  quantities,  qualities,  description,  or  manner  of 
work  done,  executed,  or  to  be  done  and  executed  by  the 
contractor,  or  to  the  quantity  and  quality  of  the  materials 
&c,," — in  short,  the  case  is  one  of  the  usual  architect's  or 
engineer's  certificate.  The  certificate  of  the  engineer  is 
held  to  be  invalid  and  of  no  value  whatever. 

Vaughan  Williams,  L.  J.,  dissents:  "As  between  the 
parties  the  agreement  of  reference  was  not  revoked  by  the 
refusal  of  the  judge  at  chambers  to  grant  a  stay  of  the 
action.  It  is  true  that,  generally  speaking,  the  obstacles  in 
the  way  of  the  arbitrator,  if  one  of  the  parties  refuses  to 
attend,  are  so  great  that  it  is  difficult,  and  sometimes  prac- 
tically impossible,  for  the  arbitrator  to  go  on  with  the 
arbitration ;  but  if  the  arbitrator  gets  over  these  difficulties 
and  goes  on  and  makes  his  award,  I  think  his  award  con- 
stitutes accord  and  sober  facts." 

By  1913,  however,  we  find  the  Privy  Council  holding, 
in  an  appeal  from  Canada,  that  "When  an  arbitration  for 
any  reason  becomes  abortive,  it  is  the  duty  of  a  Court 
of  law,  in  working  out  a  contract  of  which  such  an  arbi- 
tration is  part  of  the  practical  machinery,  to  supply  the 
defect  which  has  occurred.  It  is  the  privilege,"  note  the 
word,  "of  a  Court  in  such  circumstances  and  it  is  its 

♦•L.  R.  25  Q.  B.  D.  545. 
«7  Q.  B.  71. 


CORRECTION  OF  A  JUDICIAL  ERROR     223 

duty  to  come  to  the  assistance  of  parties  by  the  removal 
of  the  impasse  and  the  extrication  of  their  rights.  "^^ 
"This  rule,"  says  Lord  Shaw,  delivering  the  judgment 
of  their  Lordships,  "is  in  truth  founded  upon  the  soundest 
principle"  (note  that  he  does  not  rest  it  upon  Parliamen- 
tary legislation),  "it  is  practical  in  its  character,  and  it  fur- 
nishes hif  an  appeal  to  a  Court  of  justice  the  means  of 
working  out  and  of  preventing  the  defeat  of  hargains  be- 
tween parties."  ^^  And  now,  in  the  year  of  our  Lord 
1913,  his  Lordship  believes:  "It  is  unnecessary  to  cite 
authority  on  the  subject,  but  the  judgment  of  Lord  Watson 
in  Hamlyn  &  Co.  v.  Talisker  Distillery**  (from  which  we 
quote  at  p.  208  ante)  might  be  referred  to."  The  question 
before  the  Lords,  says  his  Lordship,  "went  in  principle 
to  the  incapacity  of  a  Court  of  law  to  effectuate  justice, 
hy  itself  undertaking  a  duty  to  supply  a  defect  which  had 
occurred  in  the  prescribed  mode  of  ascertaining  the  rights 
of  parties."*^  That  was  a  "long,  long  way"  to  go  from 
my  Lord  Coke  in  Vynior's  Case.  It  took  over  three  cen- 
turies. 

The  decision  does  not  refer  to  the  Arbitration  Act  of 
1889;  it  flows  from  the  spirit  of  the  Common  Law. 

In  a  very  recent  case  (May,  1916),  there  comes  before 
King's  Bench  a  contract  containing  the  following  clause: 
"A7iy  dispute  on  the  contract  to  he  settled  hy  arbitration 
in  the  usual  manner,  for  which  purpose  it  may  be  made 
a  rule  of  Court."  *^  One  of  the  parties  was  a  firm  of 
cotton-spinners  and  the  other  was  a  firm  of  chemical  manu- 
facturers. Owing  to  war  conditions,  a  dispute  arose  con- 
cerning the  furnishing  of  a  supply  of  Epsom  salts.  Under 
the  arbitration  clause,  the  chemical  manufacturers  named  a 

^^  Cameron  v.  Cuddy,  L.  R.  [1914]  A.  C.  651,  at  p.  656. 

**  Italics  ours. 

*«L.  R.   [1894]   A.  C.  202. 

«L.  E.  [1914]  A.  C.  651,  at  p.  658.     Italics  ours. 

"Bright  v.  Gibson,  32  T.  L.  R.  533. 


224?  COMMERCIAL  ARBITRATION 

Mr.  Heap  as  their  arbitrator  and  delivered  a  notice  to 
the  cotton-spinners  calling  upon  them  to  name  their  ar- 
bitrator. Upon  failure  to  name  another  arbitrator,  Mr. 
Heap  notified  the  parties  to  attend  before  him  and  the 
cotton-spinners  refused  to  attend.  Mr.  Heap  proceeded 
without  them  and  awarded  the  chemical  manufacturers 
all  they  claimed.  Then  counsel  for  the  cotton-spinners 
made  application  to  the  Court  to  set  aside  the  award  upon 
the  ground  that,  the  arbitration  not  having  been  had  in 
accordance  with  the  Arbitration  Act  of  1889,  it  was  in- 
valid, inasmuch  as  under  that  Act  there  should  have  been 
a  reference  to  a  sole  arbitrator  named  by  both  parties  joint- 
ly, or,  in  default  of  agreement,  to  an  arbitrator  appointed 
by  the  Court  under  Section  5  of  the  Act.  "The  phrase 
'in  the  usual  manner,'  "  argued  Mr.  du  Parcq,  "must 
mean  'in  accordance  with  the  law  of  the  land.'  "  On  the 
other  hand,  the  respondents  claimed  that  the  phrase  meant 
"according  to  the  custom  of  our  particular  trade."  Mr. 
Justice  Rowlatt  (Rowlatt  and  Sankey,  JJ.)  delivers  the 
judgment.  The  Court  refuses  to  accept  the  interpretation 
that  "in  the  v^ual  mamier"  means  as  a  matter  of  law, 
"in  accordance  with  the  Arbitration  Act,  1889."  "The 
Court  did  not  think  that  that  was  so.  They  thought 
that  the  clause  referred  to  Hhe  habitual  form  of  arbi- 
tration adopted  in  fact.'"^^  The  applicants  were 
given  opportunity  to  show  what  the  habitual  form  was, 
but  their  application  to  set  aside  the  award  was 
denied. 

Accordingly,  the  Common  Law  of  England  may  now  be 
taken  to  be  that  when  business  men  insert  in  a  commer- 
cial contract  a  clause  that  "Any  dispute  on  the  contract 
shall  be  settled  by  arbitration  in  the  usual  manner,"  it 
is  not  to  be  arbitrated  in  accordance  with  the  Arbitration 
Aet  of  1889,  even  though  the  words  be  added  "for  which 

**  Italics  ours. 


CORRECTION  OF  A  .JUDICIAL  ERROR     225 

purpose  it  may  be  made  a  rule  of  Court,"  but  the  habit 
or  custom  of  the  trade  shall  be  inquired  into,  and,  when 
established,  the  parties  will  be  required  to  proceed  in 
accordance  with  "the  habitual  form  of  arbitration  adopted 
in  fact." 


CHAPTER  XVII 

HOW  ENGLISH  ERROR  WORKED  INTO  AMERICAN  LAW 

It  will  be  unnecessary  to  study  all  the  American  cases. 
"With  the  exception  of  a  few  brave  pioneers  who  did  some 
original  thinking,  one  State  is  like  another.  Like  math- 
ematical computations  proceeding  with  erroneous  certain- 
ty from  initial  error,  they  arrive  at  the  same  place,  as 
they  proceed  from  Vynior's  Case  or  Kill  v.  Hollister.  To 
fix  the  precise  point  where  the  court  went  driving  along 
the  wrong  highway  we  need  but  fix  the  date  of  the  case 
and  study  the  citations.  If  we  see  Milne  v.  Gratrix,  King 
V.  Joseph,  Aston  v.  George,  Thompson  v.  Charnock,  or 
Mitchell  V.  Harris,  stated  as  "final  and  conclusive  author- 
ities," we  need  search  no  farther — we  shall  know  the  case 
at  once  as  a  pretender — not  a  real  heir  to  the  throne. 
Even  if  Scott  v.  Avery  is  cited,  we  shall  need  to  look 
farther  and  learn  whether  or  not  the  court  followed  the 
Bramwell-Esher  or  the  Cranworth-Camp'bell  interpretation 
of  it.  But  that  few  American  courts  have  been  set  upon 
the  right  highway  we  may  be  certain,  for  the  Bar  has  not 
been  assiduous  to  straighten  the  signposts.  "2  M.  to 
Vynior's  Cafe"  and  a  rest  for  luncheon  has  been  an 
enticing  avenue  to  an  easy  destination.  Of  course,  the 
older  milestones.  Erode  v.  de  Ripple,  Browne  v.  Downing 
— the  cases  in  Bracton  or  Statham — these  have  been  so 
long  buried  under  the  moss  and  ferns  that  it  were  almost 
sacrilege  to  disturb  them.^ 

*  For  a  comparison  of  early  Massachusetts  cases  with  the  English 
cases  see  "Arbitration  as  a  Condition  Precedent,"  Harvard  Law 
Review,  Vol.  11,  p.  234. 

226 


ENGLISH  ERROR  IN  AMERICAN  LAW    227 

It  will,  perhaps,  facilitate  the  study  of  the  American 
cases  if  we  arrange  their  English  relatives  in  some  line 
of  family  connection,  according  to  dates  of  birth  and  upon 
one  side  or  the  other.  Taking  any  American  case  we  can 
then  at  once  trace  its  ancestry,  if  we  but  examine  its  date 
and  refer  to  the  English  cases  upon  which  it  rests. 

By  1872,  Scott  v.  Avery,  Tredwen  v.  Holman  and  Braun- 
stein  V.  Accidental  Death  Ins.  Co.  had  been  decided.  As 
we  have  said,  however,  these  were  but  one  set  of  sign- 


FoR  Revocability 


Against  Revocability 


(1609)  Vynior's  Case 
(1670)  Hide  V.  Petit 
(1746)  Kill  V.  Hollister 

(1743)  Wellington  v.  Mack- 
intosh 
(1793)  Mitchell  V.  Harris 
(1799)  Thompson  v.   Char- 
nock 
(1806)  Mihie  V.  Gratrix 
(1814)  King  V.  Joseph 
(18 19)  Aston  V.  George 

(1859)  Horlon      v.      Sayer 

(Exch.) 
(186 1)  Leev.  Page  {.Ch.V.C.) 
(1863)  Mills  V.  Bayley 
{1867)  Elliott  V.  Royal  Exch. 

Ass.  Co.  (Exch.) 

(1870)  Thomson  v.   Ander- 

son {Ch.V.C.) 

(187 1)  Re  Rouse  and  Meyer 

(C.P.) 

(187s)  Edwards  V.  Aberayron 
Mutual  Ship  Ins. 
Soc.  (Exch.Ch.) 

(1876)  Randall  v.  Thomp- 
son (Q.B.D.) 

(1876)  Dawson  v.  Fitzgerald 
(Exch.Div.) 

(1883)  Fraser  v.  Ehrens- 
Perger  (Q.B.D.) 

(1889)  Davis  V.  Starr  (C.  of 

A.) 

(1890)  In  re  Smith  6*  Ser- 

vice and  Nelson  &* 
Sons  (Q.B.D.) 


!  Coke's    in- 
fluence 


Coke-Hard- 
wicke  influ- 
ence 


Coleridge- 
Bramwell- 
Brett  in- 
fluence 


Lord   Ken- 1  (i 7 SS)  Halfhide  v.  Penning 
yon  1 

Eldon's  de-  f  (1807-8)  Waters  v.  Taylor 
cisions         \  (1820)  Harcourt    v     Rams- 


Sugden  fol- 
lowing El-  I 
don's  deci-  J 
sions  and  1 
Halfhidev.  j 
Penning 


Cranworth- 
Campbell 
influence 


bottom 


(1840)  Dimsdale  v.   Robert- 
son 


(18SS) 
(1855) 
(185s) 


(18SS) 
(I8S6) 
(i8S9) 
(1862) 
(1866) 
(1872) 

(i87S) 

(i87S) 
(1877) 
(1878) 
(1879) 
(1879) 
(1885) 

(1887) 


Scotl  V.  Avery  (H.L.) 

Drew  V.  Drew  (H.L.) 

Northampton  Gas- 
Light  Co.  V.  Parnell 
(C.  P.) 

Braunstein  v.  Ins. 
Co. 

Russell  V.  Pellegrini 
(Q.B.) 

Wickham  v.  Hardy 
(Exch.Ch.) 

Tredwen  v.  Holman 
(Exch.) 

Seligmann  v.  Le  Bou- 
lillier  (C.P.) 

Caledonian  Railway 
Co.  V.  Greenock  &• 
Wemyss  Bay  (H.L.) 

Ripley  v.  Gt.  North- 
ern Railway  Co. 
(Rolls'  Court) 

Bremner  v.  Elder 
(H.L.) 

London  Tramways 
Co.  V.  Bailey  {Q.B.D.) 

Moffatt  v.  Cornelius 
(Q.B.D.) 

Piercy  v.  Young  (Ch. 
Div.) 

Collins  V.  Locke 
(H.L.) 

Spackman  v.  Plum- 
stead  Bd.  of  Works 
(H.L.) 

Viney  v.  Bignold 
(O.B.) 


228  COMMERCDVL  ARBITRATION 

Finally 

Herschell-Watson-CoIeridgB 

(1892)  Caledonian  Ins.  Co.  v.  Gilmour  (H.L.) 

(1892)  Trainor  v.  Phoenix  Fire  Ass.  Co.  (Q.B.) 

(1892)  Scolt  V.  Mercantile  Ins.  Co.  (C.A.) 

(1894)  Hamlyn  v.  Taiisker  Distillery  (H.L.) 

(1897)  Renshaw  1.  Queen  .Anne  Mansions  Co.  (Q.B.) 

Later  Cases 

(1901)  Belcher  v.  Roedean  School  Site  and  Buildings,  Ltd. 

(1902)  Spurrier  v.  La  Cloche  (H.  of  L.) 

(1903)  Austrian-Lloyd  Steamship  Co.  v.  Cresham  Life  Ass.  Soc.  (K.B.) 
(1907)  Gaw  V.  British  Law  Fire  Ins.  Co.  (Irish  C.  of  A.) 

(1914)     The  Cap  Blanco  (Admiralty) 
(1914)     Cameron  v.  Cuddy  (H.L.) 

posts.  Horton  v.  Sayer  and  Mills  v.  Bayley  were  another. 
In  1872  the  New  York  Court  of  Appeals  had  the  question  of 
revocability  before  it  in  Pres't,  etc.,  D.  d'  H.  Canal  Co.  v. 
Pa.  Coal  Co.,  in  50  N.  Y.  250.  Judge  Allen,  writing  for  the 
Court  of  Appeals,  accepts  the  Tredwen  v.  Holman-Braun- 
stein  V.  Ins.  Co.  interpretation — but  the  case  itself  requires 
him  to  go  no  farther  than  the  earlier  Coleridge-Bramwell 
interpretation  of  Scott  v.  Avery.  His  observations,  how- 
ever, are  of  the  utmost  importance  in  indicating  the  re- 
luctance with  which  the  New  York  Courts  accepted  the  old 
rule.     Judge  Allen  writes  with  vigor: 

"But  when  the  parties  stand  upon  an  equal  footing, 
and  intelligently  and  deliberately,  in  making  their  ex- 
ecutory contracts,  provide  for  an  amicable  adjustment 
of  any  difference  that  may  arise,  either  by  arbitration  or 
otherwise,  it  is  not  easy  to  assign  at  this  day  any  good 
reason  why  the  contract  should  not  stand,  and  the  parties 
made  to  abide  by  it,  and  the  judgment  of  the  tribunal 
of  their  choice.  Were  the  question  res  nova,  I  apprehend 
that  a  party  would  not  now  be  permitted,  in  the  absence  of 
fraud  or  some  peculiar  circumstances  entitling  him  to  relief, 
to  repudiate  his  agreement  to  siihmit  to  arbitration,  and 
seek  a  remedy  at  law,  when  his  adversary  had  not  refused  to 
arbitrate,  or  in  any  way  obstructed  or  hindered  the  arbi- 
tration agreed  wpon."  ^ 

»50  N.  Y.  250,  at  p.  258.     Italics  ours. 


ENGLISH  ERROR  IN  AMERICAN  LAW    229 

"Mr.  Justice  Crowder,"  says  Judge  Allen,^  "in  making 
response  to  the  question  propounded  by  the  lords  to  the 
judges,  in  Scott  v.  Avery,  thus  states  the  question  and 
the  answer  to  it:  'Can  a  shipowner  and  an  insurer  enter 
into  a  valid  agreement  that  the  shipowner  shall  pay  down 
a  given  sum,  and  that  in  consideration  of  such  payment 
the  insurer  upon  the  loss  of  a  given  ship  shall  pay  to 
the  said  owner,  not  the  amount  of  the  loss  sustained  by 
her  through  the  perils  of  the  sea,  but  only  such  sum 
of  money  as  shall  be  settled  and  ascertained  by  arbitration. 
I  am  not  aware  of  any  legal  objection  to  such  a  contract, 
whatever  may  be  thought  of  its  prudence.  And  I  think 
the  effect  of  such  a  contract  is,  that  no  action  lies  for 
the  breach  of  it,  until  the  same  has  been  ascertained  by 
arbitration,'  The  judge,"  says  Judge  Allen  further, 
"lays  no  stress  upon  the  form  of  the  contract,  but  regards 
the  provision  for  determining  the  amount  to  be  paid  by 
arbitration  as  in  legal  effect  postponing  the  right  of  action 
until  after  the  award  is  made. ' ' 

Judge  Allen's  examination  of  the  English  eases  led  him 
to  conclude  that  "It  is  not  necessary  that  it  should  be 
put  in  the  technical  form  of  a  'condition  precedent,'  and 
the  courts  will  give  effect  to  the  real  intention  of  the 
parties,  as  clearly  indicated  by  the  agreement. ' '  *  And 
in  referring  to  the  Braunstein  case,  he  calls  attention 
to  the  fact  that  in  that  case  "the  policy  did  not,  in  terms, 
declare  that  the  award  of  arbitrators  sliould  he  a  conditioTi 
precedent  to  the  bringing  of  am  action."^  On  the  con- 
trary, as  he  points  out,^  the  covenant  was  "to  the  effect 
that,  in  case  of  difference  of  opinion  as  to  the  amount 
of  compensation,  the  question  should  he  referred  to  arhi- 
t ration,  and  the  award  made  shmild  he  taken  as  a  full 

Ubid.,  p.  268. 

*  Ibid.,   citing  American  note  to  Braunstein   v.   Accidental  Death 
Ins.  Co.,  101   English  Cora.  Law  K.,  783. 
'^  Ibid.,  p.  269.     Italics  ours. 


230  COMMERCIAL  ARBITRATION 

settlement  of  the  question."  Our  highest  court  in  this 
day  (1872)  is  inclined  to  treat  the  revocation  of  an  ar- 
bitration agreement  as  a  failure  "to  give  effect  to  con- 
tracts, when  lawful  in  themselves,  according  to  their  terms 
and  the  intent  of  the  parties."^  Thus  it  accepts  the  doc- 
trine laid  down  by  Lord  Eldon  in  Waters  v.  Taylor  and 
Harcourt  v.  Eamshottom.  "Any  departure  from  this  prin- 
ciple,"'^ says  Judge  Allen,  "is  an  anomaly  in  the  law," 
not  to  be  extended.  Nevertheless,  says  he,  "the  rule  that 
a  general  covenant  to  submit  any  differences  that  may 
arise  in  the  performance  of  a  contract,  or  under  an 
executory  agreement,  is  a  nullity,"  note  the  word  "is  too 
well  established  to  he  now  questioned."  ^  At  this  point 
Judge  Allen  missed  the  right  road.  The  fact  is  that  the 
doctrine  was  being  questioned  in  England  and  a  settle- 
ment of  the  controversy  was  not  had  until  twenty  years 
after  Judge  Allen  wrote.  Nevertheless,  the  case  before 
him,  as  Judge  Allen  himself  says,  did  not  require  de- 
termination of  this  specific  controversy — "the  decision  of 
the  appeal  of  the  present  defendant  does  not  make  it  7iec- 
essary  to  inquire  into  the  reasons  of  the  rule,  or  ques- 
tion its  existence."  ^ 

So,  in  New  York,  our  highest  court  had  traveled  this 
far  by  1872 : 

1.  The  annulment  of  covenants  to  arbitrate  is  an  anom- 
aly in  the  law. 

2.  The  soundness  of  the  rule  is  doubtful. 

3.  If  it  were  not  for  its  binding  force  as  a  precedent, 
it  would  not  be  followed. 

4.  It  need  not  be  questioned  at  this  time.  The  court 
accepts,  for  the  purpose  of  the  case,  the  Coleridge-Bram- 
well  interpretation  of  Scott  v.  Avery. 

«50  N.  Y.  230,  at  pp.  258-259.     Italics  ours. 
'  Ibid.,  p.  2.59.     Italics  ours. 
^  Ibid.,  p.  258.     Italics  ours. 
*  Ibid.     Italics  ours. 


ENGLISH  ERROR  IN  AMERICAN  LAW   231 

Judge  Allen  refers  at  p.  268  to  Braunstein  v.  Accidental 
Death  Ins.  Co.,  as  reported  in  101  Eng.  Com.  Law  Re- 
ports (with  American  notes).  The  "American  notes"  are 
by  Henry  Wharton  of  Philadelphia  and  appeared  in  1863. 
It  will  pay  us  to  consider  them  for  a  moment.  The  editor 
says  (p.  799)  : 

"In  the  earlier  decisions  it  was  laid  down  as  an  ab- 
solute and  unqualified  rule  of  law,  that  a  mere  agree- 
ment to  refer  disputes  arising  out  of  a  particular  con- 
tract to  arbitration,  was  no  bar  to  an  action;  for  it  was 
said  such  an  agreement  was  contrary  to  public  policy, 
as  tending  to  oust  the  jurisdiction  of  the  court"  (citing 
early  cases). 

"  It  is  not  necessary, ' '  he  says,  ' '  to  attribute,  as  has  been 
sometimes  done,  to  the  judges  by  whom  this  rule  was 
first  established,  any  selfish  motive,  such  as  a  love  of 
power,  or  a  fear  of  losing  the  emoluments  of  office.  The 
rule  had  within  certain  limits  a  sound  basis."  Here  we 
have  an  American  explanation :  "  It  is  not  wise  or  right 
in  general  to  sanction  contracts  by  which  men  through 
ignorance,  folly,  or  pressure,  deprive  themselves  of  the 
protection  which  the  law  affords  them.  On  the  whole  it 
is  better  to  guarantee  that  protection  to  all,  though  some 
at  times  may  not  understand  its  importance. 

"Still,"  he  says,  "i/i  modern  times,  the  expense  and 
loss  of  time  always  incident  to  litigation,  and  in  certain 
classes  of  cases  the  Jinoivn  prejudices  of  juries,  constantly 
induce  persons  to  propose  and  assent  to  agreements  for 
reference  of  possible  disputes  to  arbitration." 

But  if  this  be  so,  how  are  the  generally  weak  or  foolish 
to  be  protected?  may  be  asked.  "This,  when  the  parties 
stand  on  equal  terms,  is  reasonable  in  itself,  and  leaves 
it  still  open  to  the  courts  to  decide  whether  any  particular 
case  falls  within  the  agreement;  to  compel  or  dispense 
with  a  reference  when  it  is  wrongfully  refused  or  evaded 
by  one  of  the  parties;  and  to  enforce  the  award  when 


^22  COMMERCIAI.  ARBITRATION 

properly  7nade."  "And,"  says  he  further  (this  was  writ- 
ten in  1863,  long  prior  to  the  House  of  Lords'  decisions  in 
Hamlyn  v.  Talisker  Distillery  and  the  later  cases)  "when 
the  parties  do  not  stand  on  equal  terms,  the  aid  of  a  Court 
of  Equity  can  always  he  had,  as  in  any  other  case  of  con- 
tract." 

Accordingly,  Wharton  finds  "the  tendency  of  the  more 
recent  decisions"  to  be  "to  give  effect  to  such  agreements, 
under  the  qualifications  just  suggested;  at  least  where 
the  reference  is  expressly  made  a  condition  precedent  to 
the  right  to  sue."  *' Perhaps,  indeed,"  says  he,  "when  the 
modern  theory  on  the  siCbject  comes  to  he  fully  worked 
out,  it  will  not  he  considered  necessary  thai  the  agreement 
to  refer  should  he  put  in  the  strict  technical  form  of  a  'con- 
dition precedent,'  hut  the  real  intention  of  the  parties  will 
he  rather  considered." 

The  "modern  theory"  has  now  been  worked  out  in  Eng- 
land. In  that  country  today  it  is  assumed  that  when 
parties  agree  to  arbitrate,  their  intention  is  not  to  sue 
until  the  arbitration  has  been  had. 

In  his  argument  to  sustain  the  arbitration  in  D  <&  H. 
Canal  Co.  v.  Pa.  Coal  Co.,  Mr.  Southmayd  ^^  referred  to 
"the  old  rule  of  law  which  we  found  in  the  English  books, 
and  which  we  have  all  learned  as  law  students — that  an 
agreement,  for  submission  to  arbitration,  of  a  cause  of 
action  cognizable  in  the  Courts  of  law  or  equity,  is  not 
pleadable  in  bar  to  a  suit  brought  upon  such  cause  of  ac- 
tion." Though  this  doctrine  "was  established  in  the  Eng- 
lish courts  a  long  time  ago"  and  "was  at  a  time  when 
those  courts  were  struggling  for  the  enlargement  of  their 
jurisdiction  and  when  they  were  all  greatly  disinclined 
to  assent  to  anything  which  would  have  the  effect  to 
abridge  either  the  particular  jurisdiction  of  themselves 
or  the  jurisdiction  of  all  the  courts" — this  learned  l&wyer 
was  content  to  accept  as  binding  law  the  proposition  * '  that 
'"P.  2  of  his  printed  argument. 


ENGLISH  ERROR  IN  AMERICAN  LAW   233 

the  attempt  of  parties  to  substitute  a  tribunal  constituted 
by  themselves,  for  the  decision  of  a  question  which,  by 
the  law  of  the  land,  is  cognizable  by  the  courts  of  the 
country,  is  against  public  policy." 

Yet  he  could  not  harmonize  this  doctrine  with  the  rule 
that  a  counter-suit  could  be  maintained  for  breach  of  the 
agreement  to  arbitrate,  nor  could  he  understand  why,  since 
"the  object  of  an  agreement  to  arbitrate  is  to  avoid  liti- 
gation," you  should  give  such  a  construction  to  the  agree- 
ment as  would  really  give  the  party  "the  luxury  of  having 
two  law -suits  in  lieu  of  one."  Said  he,  "It  is  difficult 
to  perceive  that  you  make  any  approach  to  carrying  out 
the  purpose  for  which  the  contract  was  made." 

And  he  found,  also,  that  this  original  doctrine  had 
come  to  be  doubted  by  the  English  judges — even  Lord 
Kenyon  having  come  "seriously  to  doubt  whether  it  really 
rested  upon  any  very  solid  ground  of  principle,  and  to 
doubt  whether  the  original  establishment  of  the  rule  was 
sound  or  wise." 

"Nevertheless,  they  said  the  rule  was  established  firmly 
in  the  law,  and  whatever  might  be  the  opinion  of  the 
courts  in  regard  to  its  wisdom  or  soundness,  it  must  he 
accepted  as  a  part  of  the  established  law  of  the  land." 
And  so  he  concedes  the  whole  point. 

This,  Mr.  Southmayd  believed,  was  Lord  Kenyon 's  con- 
clusion in  Thompson  v.  CharnocJc  and  he  dug  no  farther. 
He  did  not  discuss  Dimsdale  v.  Bohertson,  where,  in  1840, 
Lord  Sugden  pointed  out  that  Lord  Kenyon 's  views  in 
Halfhide  v.  Fenning  were  still  the  law  of  England.  Like 
Bramwell  in  England,  Southmayd,  in  New  York,  fastens 
the  limited  and  narrow  construction  of  the  law  upon  our 
Common  Law.  His  whole  argument  is  confined  to  the 
"condition  precedent"  theory  and  does  not  venture  into 
original  sources.  He  is  obliged  to  admit  that  the  doc- 
trine was  in  England  "now  upheld  purely  on  the  principle 
of  stare  decisis";  and  he  asserts  that  "t/  at  amj  time 


234  COINIMERCIAL  ARBITRATION 

within  the  last  fifty  years  the  question  would  ha/ve  heen 
presented  as  a  new  one  to  the  courts,  no  such  doctrine 
ivould  have  heen  estailkhed."  Like  Bramwell,  however, 
he  could  win  his  case  by  conceding  the  unsound  rule  and 
arguing  for  its  qualification:    This  he  succeeds  in  doing.^^ 

If,  how^ever,  Mr.  Southmayd  had  made  a  careful  histori- 
cal analysis  of  the  English  cases,  is  there  any  doubt  that 
he  could  have  induced  Judge  Allen  to  reject  Thompson  v. 
Charnock  as  stare  decisis? 

Three  years  later  (1875)  Chief  Justice  Andrews  writes 
(Fudickar  v.  Guardian  Mutual  Life  Ins.  Co.)  :^^ 

"It  is  the  general  doctrine  pervading  our  jurisprudence 
on  the  subject,  that  the  decision  of  an  arbitrator  in  a 
matter  within  his  jurisdiction  is  final  and  conclusive  be- 
tween the  parties.  The  jealousy  with  which,  at  one  time, 
courts  regarded  the  withdrawal  of  controversies  from 
their  jurisdiction  hy  the  agreement  of  parties,  has  yielded 
to  a  more  sensible  view,  and  arbitrations  are  now  en- 
couraged as  an  easy,  expeditious  and  inexpensive  method 
of  settling  disputes,  and  as  tending  to  prevent  litiga- 
tion.'* 

The  agency  theory  underlying  Coke's  dictum  in  Yynior's 
Case  is  nowhere  more  clearly  disposed  of  than  by  Judge 
Andrews'  definition  of  an  arbitrator.  He,  said  Judge  An- 
drews, is  "a  judge  appointed  by  the  parties;  he  is  by  their 
consent  invested  with  judicial  functions  in  the  particular 
case;  he  is  to  determine  the  right  as  between  the  parties 
in  respect  to  the  matter  submitted,  and  all  questions  of 

"  Francis  Lynde  Stetson,  ex-president  of  The  Association  of  the 
Bar  of  the  City  of  New  York  and  one  of  the  leaders  of  the  New- 
York  Bar,  discussing  the  report  of  the  Committee  on  Prevention  of 
Unnecessary  Litigation  at  the  1917  meeting  of  the  New  York  State 
Ear  Association,  said:  "...  the  decision  originally  in  this  State 
and  in  the  Delaware  4'  Siidson  Case  and  the  Pennsylvania  Coal  Com' 
pany  Case  was  a  dreadful  blow  to  peace  and  contrary  to  the  spirit 
of  the  Constitution  then  prevailing,  the  Constitution  of  1846,  which 
jyrovided  specially  for  tribunals  of  conciliation."  (Eeports,  New 
York  Stat«  Bar  Association,  Vol.  XL,  1917,  p.  404.) 

"  62  N.  Y.  392,  at  p.  399.     Italics  ours. 


ENGLISH  ERROR  IN  AMERICAN  LAW   235 

fact  or  law  upon  which  the  right  depends  are,  under  a 
general  submission,  deemed  to  be  referred  to  him  for  de- 
cision. ...  If  courts  should  assume  to  rejudge  the  de- 
cision of  arbitrators  upon  the  merits,  the  value  of  this 
method  of  settling  controversies  would  be  destroyed,  and 
an  award  instead  of  being  a  final  determination  of  a  con- 
troversy would  become  but  one  of  the  steps  in  its  prog- 
ress." " 

In  1877  the  New  York  Court  of  Appeals  said:  "We 
are  not  at  liberty  to  be  hypercritical  for  the  purpose  of 
overturning  the  decisions  of  these  domestic  tribunals,  and 
compelling  a  resort  to  the  courts  of  justice.  It  would  be 
better  for  the  people  if  more  of  their  controversies  should 
be  settled  in  the  same  way,  and  justice  would  be  quite  as 
likely  to  be  done  as  when  administered  by  the  more  formal 
methods  of  litigation  in  the  courts.  A  liberal  interpreta- 
tion should  be  given  to  the  submission,  and  the  award 
made,  to  uphold  the  latter  when  it  is  not  attacked  for  cor- 
ruption or  misconduct  of  the  arbitrator. ' '  " 

Forty  years  later  than  the  Z>.  &  H.  Case  {Welch  v. 
Prohsty^  the  Appellate  Division  of  the  Fourth  Depart- 
ment upholds  the  practice  of  arbitration  "in  the  light  of 
the  custom,  which  prevailed  in  New  York  City."  Where 
there  was  but  a  most  informal  interchange  of  letters  it 
adopted  the  course  of  the  trade  for  creating  arbitration, 
saying : 

"It  is  the  policy  of  the  courts  to  encourage  and  uphold 
arbitrations,  as  they  are  an  inexpensive,  simple  and  ex- 
peditious method  of  adjusting  controversies,  and  tend  to 
prevent  litigation. "  ^^ 

In  the  D.  &  H.  Canal  Co.  v.  Pennsylvania  Coal  Co. 
Case,  Judge  Allen  cites  three  New  York  cases.    These  we 

"7&i(Z.,  pp.  399,  400. 

^*  Curtis  V.  GoTcey,  68  N.  Y.  300,  at  p.  305. 

"151  App.  Div.   147    (1912). 

^' Ibid.,  p.  151.     Italics  ours. 


236  COM]\IERCIAL  ARBITRATION 

shall  now  briefly  consider.  The  first  is  Wood  v.  Lafayette  " 
in  1871  (Judge  Grover  writing  the  opinion).  Here  the 
Court  held  flatly  that  an  agreement  to  submit  an  exist- 
ing controversy  to  arbitration  was  revocable.  It  cites 
no  authority  for  its  conclusion,  merely  saying:  By  an 
agreement  the  matter  of  a  boundary  line  "the  parties 
agreed  to  submit  to  Mann,  and  to  abide  by  his  decision. 
This  was  the  only  matter  with  which  he  had  anything 
to  do;  everything  else  was  settled  by  the  agreement.  In 
determining  where  the  line  was,  Mann  was  to  act  as  ar- 
bitrator ;  his  power  so  to  act  was  revocable  hy  either  party, 
as  is  the  case  in  every  siihmission  to  arbitrators,  if  exer- 
cised at  the  proper  time/'  Even  the  fact  that  it  was 
part  of  an  agreement  to  settle  an  existing  suit  made  no 
difference.  "The  fact  that  there  was  a  consideration  for 
the  agreement,  in  the  settlement  of  the  existing  suit,  makes 
no  difference  in  this  respect.  Every  agreement  to  arbi- 
trate must,  to  be  valid,  be  based  upon  a  consideration. 
.  .  .  The  agreement  to  submit  the  question  to  Mann  was 
the  only  part  revocable  by  either  party;  his  power  having 
been  revoked,  his  subsequent  determination  was  not  bind- 
ing upon  the  parties."  It  is  difficult  to  follow  this  reason- 
ing. The  parties  are  held  to  their  entire  contract  save 
the  one  feature  which  is  to  keep  them  from  further  liti- 
gation. Though  this  feature  was  in  their  minds  an  es- 
sential element  in  the  making  of  the  contract,  either  one 
may  keep  the  rest  of  the  contract  and  cancel  the  portion 
providing  for  arbitration  however  unjust  a  result  might 
thus  be  produced. 

The  second  New  York  case  cited  by  Judge  Allen  is 
Smith  V.  Compton,^^  in  1855,  decided  by  the  Supreme 
Court  of  Cayuga  County  (T.  R.  Strong,  J.)  holding  that 
"An  agreement  of  submission  of  matters  in  difference 
to  arbitrators,  followed  by  the  arbitrators  entering  upon 

"  Wood  V.  Lafayette,  46  N.  Y.  484,  at  p.  489-490.     Italics  ours. 
"  20  Barb.  262,  at  p.  267. 


ENGLISH  ERROR  IN  AMERICAN  LAW  ^37 

their  duties — the  arbitration  being  still  pending  and  un- 
determined— constitutes  no  defense,  or  legal  obstacle,  in 
abatement  or  in  bar,  to  an  action  for  the  same  matters, 
commenced  after  the  making  of  the  agreement.  Such  an 
agreement  is  a  mere  authority,  revocable  by  either  party, 
at  any  time  before  the  case  is  finally  submitted  to  the 
arbitrators  for  decision,  subject  only  to  liability  for  dam- 
ages." Counsel  for  neither  of  the  parties  referred — so  far 
as  the  report  shows — to  any  of  the  English  cases,  and  the 
Court  relied  entirely  on  Story's  Eq.  Juris.  §1457,  and 
"cases  there  cited,"  saying:  "The  principle  is  well  set- 
tled, that  a  specific  performance  of  an  agreement  to  refer 
a  subject  of  controversy,  will  not  be  enforced  by  the 
courts,  on  the  ground  that  it  is  against  public  policy 
thereby  to  exclude  parties  from  a  resort  to  the  proper 
judicial  tribunals." 

The  third  case  cited  by  Judge  Allen  is  Haggart  v.  Mor- 
gan'^^  (1851),  wherein  the  Court  of  Appeals  (Gardiner, 
J.)  held  that  "the  agreement  to  arbitrate,  only  entitled 
the  party  to  damages,  but  was  no  bar  to  an  action,"  cit- 
ing for  this  Mitchell  v.  Harris, ^'^  whose  lack  of  binding 
force  as  an  English  precedent  has  been  clearly  demon- 
strated,2i  and  2  Stoiy's  Eq.  Jur.  §§1457-8,  which  we 
shall  consider  later.^^  In  this  case  the  arbitration  clause 
under  consideration  was  part  of  a  building  contract  and 
was  limited  to  "any  dispute  which  should  arise  respecting 
the  work  or  finish  of  the  building."  The  case  discloses 
a  complete  absence  of  research  or  study  of  the  English 
precedents.    "We  turn  now  to  more  recent  cases. 

In  Benson  v.  Eastern  Building  and  Loan  Association  " 
decided  in  1903,  there  was  a  provision  in  certain  building 
loan   certificates  that  "any   action  brought  against  this 

"5  N.  Y.  (1  Seld.)  422. 

="2  Ves.  Jr.  129,  Sumner's  Ed.  and  note. 

"  See  ante,  pp.  153-159. 

"  See  post,  pp.  250-252. 

^  174  N.  Y.  83,  at  p.  86,  87.     Italics  oura 


I 

238         co:mmercial  arbitration 

association  (defendant)  shall  be  commenced  within  six 
months  after  filing  proofs  and  in  the  county  of  Onon- 
daga and  state  of  New  York."  The  Court  of  Appeals  holds 
this  valid  and  says  that  "If  in  violation  of  the  stipula- 
tion the  plaintiff  brought  his  action  in  another  county, 
the  defendant's  remedy  was  to  move  to  have  the  place  of 
trial  changed  to  that  in  which  the  plaintiff  had  agreed 
it  should  be  brought.  .  .  .  The  erroneous  practice  neither 
affects  the  jurisdiction  of  the  court  nor  defeats  the  cause 
of  action."  But  the  Court  sees  clearly  the  logical  effect 
of  the  argument  that  this  provision  in  the  contract  at- 
tached a  condition  to  the  contract.  Discussing  the  argu- 
ment that  "the  parties  have  agreed  that  the  shareholder 
should  have  no  cause  of  action  against  the  defendant  un- 
less his  action  was  brought  in  the  specified  county  in  the 
state  of  New  York,  and  that,  therefore,  when  he  brings 
a  suit  elsewhere,  his  cause  of  action  is  not  established," 
"We  think,"  says  Judge  Cullen,  ''this  argument  proves 
too  much.  It  is  difficult  to  see  why  it  would  not  uphold 
an  agreement  that  all  claims  against  the  parties  should 
he  determined  by  arhitrators  and  not  hy  the  courts.  It 
might  he  said  with  as  much  force  in  such  a  case  as  in 
the  one  now  he  fore  us  that  the  cause  of  action  could, 
under  the  agreement,  accrue  only  on  the  decision  of  the 
arhitrators."  Yes,  this  is  thoroughly  sound  reasoning,  as 
the  English  judges  finally  decided.  ''Yet,''  says  Judge 
Cullen,  "nothing  is  hetter  settled  than  that  agreements  of 
the  character  mentioned  are  void.'*  And  for  this  he 
cites  the  D.  &  H.  Canal  Company  Case,  which,  as  we  have 
seen,  is  no  authority  at  all  for  the  proposition. 

Thus  is  unsound  decision  rested  upon  unsound  decision 
and  erroneous  doctrine  piled  upon  erroneous  doctrine. 

In  April,  1895,  the  case  of  Sanford  v.  Commercial 
Travelers'  Assn.^*  came  before  the  Appellate  Division  of 
the  Fourth  Department.    Upon  appeal  the  Court  of  Appeals 

•♦86  Hun  380. 


ENGLISH  ERROR  IN  AMERICAN  LAW   239 

followed  the  court  below  -^  in  holding  invalid  a  clause  which 
provided  that  "the  issues  in  any  action  brought  against  it 
(the  defendant)  under  this  certificate,  shall,  on  the  de- 
mand of  this  association  or  its  attorney,  be  referred  for 
trial  to  a  referee  to  be  appointed  by  the  court  in  which 
such  action  is  brought."  Here,  obviously,  was  no  ouster 
of  jurisdiction  of  the  courts,  merely  a  waiver  of  trial 
t>y  jury  and  consent  in  advance  to  a  referee  to  be  named 
hy  the  court.  Yet  this  fear  of  "ouster"  was  so  terrifying 
that  even  a  clause  such  as  this  one  was  held  to  be  in- 
valid, the  Court  of  Appeals  relying  upon  the  opinion  of 
the  Appellate  Division  below.  When,  however,  we  turn  to 
the  opinion  of  the  Court  below,  we  find  (as  we  might 
expect  to  find),  that  reliance  is  placed  upon  the  English 
cases  of  Kill  v.  HolUster,  Mitchell  v.  Harris,  Thompson 
V.  Charnoch,  Street  v.  Bighy,  Scott  v.  Avery,  Horton  v. 
Sayer,  Roper  v.  Lendon  and  the  whole  line  of  now  dis- 
credited English  precedents.  The  really  authoritative  and 
controlling  line  of  Halfhide  v.  Fenning,  Waters  v.  Tay- 
lor, Harcourt  v.  Ramshottom,  Dinisdale  v.  Robertson,  Drew 
V.  Drew  and  the  later  cases  (1872-1894,  especially  Trainor 
V.  Phoenix  Fire  Ins.  Co.,  Scott  v.  Mercantile  Ins.  Co.  and 
Hamlyn  v.  Talisker  Distillery)  are  not  even  referred  to. 
American  cases  in  other  states  and  Federal  cases  resting 
upon  the  obsolete  English  authorities  are  piled  upon  each 
other  till  they  make  a  fastness  seemingly  too  formidable 
to  attack. 

Greason  v.  Keteltas,^^  in  the  Court  of  Appeals  in  1858 
(Selden,  J.),  rests  upon  Mitchell  v.  Harris,  2  Ves.  Jr.  129, 
notes  3,  4,  Sumn.  ed.  "So  scrupulously,"  says  the  Court, 
"is  this  right  of  revocation  guarded,  that  it  is  not  lost, 
although  the  submission  has  been  actually  made  a  rule 
of  court."     Waters  v.  Taylor,  Harcourt  v.  Ramshottom, 

» 147  N.  Y.  326. 
»«17N.  Y.  491. 


240  COMMERCIAL  ARBITRATION 

Dimsdale  v.  Robertson — all  later  and  more  authoritative 
— are  not  even  cited  by  the  Court. 

Thus  in  the  New  York,  as  in  the  earlier  English  law, 
specific  performance  of  an  agreement  to  arbitrate  is  not 
allowed.  The  courts  oust  themselves  of  jurisdiction  to 
enforce  the  contract  of  the  parties. 

The  "right  of  revocation"  is  "the  policy  of  the  law" 
says  Judge  Selden,  and  is  founded  "in  the  obvious  im- 
portance of  securing  fairness  and  impartiality  in  every 
judicial  tribunal.  Arbitrators  being  selected,  not  by  law, 
but  by  the  parties  themselves,  there  is  danger  of  some 
secret  interest,  prejudice  or  bias  in  favor  of  the  party 
making  the  selection;  and  hence  the  opposite  party  is 
allowed,  to  the  latest  moment,  to  make  inquiries  on  the 
subject."  Yet  our  Code  permits  parties  to  select  their 
own  referees  and  even  their  own  arbitrators. 

Perhaps  the  most  modern  statement  of  what  we  have 
here  treated  as  error  is  the  one  in  Sanford  v.  Accident 
Association^'^  (1895),  in  which  Judge  Gray  holds  invalid 
an  agreement  in  a  policy  that  in  case  suit  be  brought  it 
shall  "be  referred  for  trial  to  a  referee  to  be  appointed 
by  the  court."  He  says:  "We  may  safely  base  the  rea- 
son for  the  application  of  this  rule  upon  the  proposition 
that  public  policy  is  opposed  to  the  enforcement  of  an 
agreement,  which  supersedes  the  law  and  deprives  the  in- 
dividual of  the  protection  which  it  was  designed  and  framed 
to  afford"  and  this  "protection"  is  ''the  constitutional 
provision  which  secures  to  a  party  the  right  of  trial 
by  jury." 

The  right  of  trial  by  jury  is  one  that  can  be  waived. 
The  right  to  bring  suit  at  all  can  be  waived.  The  parties 
may  waive  it  by  agreement  to  forbear  from  bringing  suit, 
or,  after  suit,  by  stipulating  in  open  court  to  discontinue. 
They  may  even  consent  to  the  entry  of  judgment.  By 
so  doing,  of  course,  they  set  aside  and  supersede  the  opera- 

"  147  N.  Y.  326,  at  p.  ?.28,  329.     Italics  ours. 


ENGLISH  ERROR  IN  AMERICAN  LAW    241 

tion  of  the  law  and  ' '  the  protection  which  it  was  desired 
and  framed  to  afford."  Yet  it  is  not  against  public  pol- 
icy.^® In  the  ease  of  The  Oranmorej^^  the  parties  stipulated 
that  "Any  questions  arising  under  this  contract  or  the 
bill  of  lading  against  the  steamer  or  her  owners  shall 
be  determined  by  English  law  in  England."  The  Court 
held  that  this  was  valid  and  that  "the  court  should  give 
effect  to  this  clause  of  the  agreement.  It  leaves  the  in- 
tention of  the  parties  beyond  doubt  of  any  kind,  and  that 
intention  was  to  give  to  the  provisions  of  the  bill  of  lading 
such  efficacy  as  the  English  courts  would  give  to  them." 

"/See  also  McAllister  v.  Smith,  17  111.  328,  334;  Dike  v.  Erie 
Railway  Co.,  45  N.  Y.  113,  116;  Grand  v.  Livingston,  4  App.  Div.  589, 
593;  Union  National  Banh  v.  Chapman,  169  N.  Y.  538,  545;  Le 
Breton  v.  Miles,  8  Paige  261. 

"24  Fed.  Kep.  922. 


CHAPTER  XVIII 

THE  DEVELOPMENT  IN  THE  PEDEEAL  (U.  S.)  COURTS 

In  the  introduction  ^  we  referred  to  the  decision  by 
Judge  Hough  in  United  States  Asphalt  Refini7ig  Co.  v. 
Trinidad  Lake  Petroleum  Co.-  as  the  incident  which  set 
in  motion  the  protests  of  the  London  Court  of  Arbitration 
to  the  New  York  Chamber  of  Commerce.  We  are  now 
ready  to  study  Judge  Hough's  opinion  more  in  detail. 
First  of  all,  the  learned  judge  clearly  indicates  his  lack 
of  sympathy  with  the  rule.  For  "refusing  to  give  effect 
to  the  agreements  of  men  of  mature  age,  and  presumably 
sound  judgment,"  says  he,  ''there  has  long  been  a  great 
variety  of  available  reasons."  These  agreements  have, 
he  believes,  "the  intended  effect  ...  to  prevent  proceed- 
ings in  any  and  all  courts  and  substitute  therefor  the  de- 
cision of  arbitrators."  The  plaintiff's  action  in  refusing 
to  carry  out  the  provision  for  arbitration  ^  he  aptly  de- 
scribes as  "this  libelant's  contract  breaking"  and  this 
leads  him  "to  consider  at  some  length  the  nature  and 
history  of  the  reasons  adduced  to  justify  the  sort  of  con- 
duct, hy  no  means  new,  hut  remarkably  well  illustrated" 
in  the  case  before  him. 

*Pp.  ix,  X. 

"222  Fed.  Rep.  1006. 

* "  19.  Any  dispute  arising  under  this  charter  shall  be  settled  in 
London  by  arbitration,  the  owners  and  charterers  each  appointing  an 
arbitrator,  and  tlie  two  so  chosen,  if  they  do  not  agree,  shall  appoint 
an  umpire,  the  decision  of  whom  shall  be  final.  Should  either  party 
refuse  or  neglect  to  appoint  an  arbitrator  within  21  days  of  being 
required  to  do  so  by  the  other  party,  the  arbitrator  appointed  may 
make  a  final  decision  alone,  and  this  decision  shall  be  binding  upon 
both  parties.  For  the  purpose  of  enforcing  any  award,  this  agree- 
ment shall  be  made  a  rule  of  court. ' ' 

242 


DEVELOPMENT  IN  THE  FEDERAL  COURTS    243 

First  of  all,  he  quotes  from  Lord  Campbell  in  Scott 
V.  Avery  * — * '  in  the  contests  of  the  courts  of  ancient  times 
for  extension  of  jurisdiction — all  of  them  being  opposed 
to  anything  that  would  altogether  deprive  every  one  of 
them  of  jurisdiction"  and  says  that  it  ''has  never  been 
denied  that  the  hostility  of  English-speaking  courts  to  ar- 
bitration contracts  probably  originated,"  as  Lord  Camp- 
bell said  it  did.  ''A  more  unworthy  genesis,"  says  Judge 
Hough,  "cannot  be  imagined." 

Since  Lord  Kenyon's  time  (Thompson  v.  Charnock^), 
'  *  it  has  been  customary  to  stand  rather  upon  the  antiquity 
of  the  rule  than  upon  its  excellence  or  reason"  and  there 
is  "little  difference,"  he  believes,  "between  Lord  Ken- 
yon  's  remark ' '  in  this  regard  and  the  words  of  Judge  Car- 
dozo  in  the  Meadiam  case.^  "Nevertheless  the  legal  mind 
must  assign  some  reason  in  order  to  decide  anything  with 
spiritual  quiet" — note  the  language — and  so  he  proceeds 
to  analyze  in  order  the  five  reasons  (a)  the  contract  is 
in  its  nature  revocable;  (b)  such  contracts  are  against 
public  policy;  (c)  the  covenant  to  refer  is  hut  collateral 
to  the  main  contract,  arid  may  he  disregarded,  leaving 
the  contract  keeper  to  his  action  for  damages  for  breach 
of  such  collateral  covenant;  (d)  any  contract  tending  to 
ivholly  oust  the  courts  of  jurisdiction  violates  the  spirit 
of  the  laws  creating  the  courts,  in  that  it  is  not  com- 
petent for  private  persons  either  to  increase  or  diminish 
the  statutory  juridical  power;  (e)  arbitration  may  be  a 
condition  precedent  to  suit,  and  as  such  valid,  if  it  does 
not  prevent  legal  ax,tion,  or  seek  to  determine  out  of  court 
the  general  question  of  liability. 

The  doctrine  of  revocability,  the  judge  finds,  as  we 
have  found,  rests  upon  Vynior's  Case  "and  is  now  some- 
what old-fashioned,  although  it  appears,"  with  due  cita- 

*5  H.  L.  C.  811. 

"8  T.  E.  139. 

'Meacham  v.  Jamestown,  etc.,  B.  S.  Co.,  211  N.  Y.  346,  at  p.  354. 


244  COMMERCIAL  ARBITRATION 

tions  of  authorities,  in  two  modem  cases  to  which  the 
judge  refers.^  "The  Public  Policy  Doctrine,"  the  learned 
judge  finds,  as  we  have  found,  has  no  substantial  basis 
in  reason;  "of  late  years  the  higher  courts  have  been 
somewhat  chary  of  the  phrase  'public  policy,'  "  (and  he 
illustrates  from  Insurance  Co.  v.  Morse,^  Doyle  v.  Conti- 
nental Insurance  Co.,^  and  Perkins  v.  United  States,  etc., 
Co.)  ^0  "But  neither  the  court  (the  U.  S.  Supreme  Court) 
nor  the  commentator  (Story)  pointed  out  any  other  meth- 
od by  which  an  arbitration  agreement  could  be  against  the 
policy  of  the  law,  unless  it  were  by  seeking  to  divest  the 
'ordinary  jurisdiction  of  the  common  tribunals  of  jus- 
tice.' "  This  divesting  of  jurisdiction  we  have  considered 
so  fully  in  other  chapters  that  we  need  not  here  repeat 
the  demonstration  of  its  unsoundness.  But,  ' '  Having  built 
up  the  doctrine  that  any  contract  which  involves  an  '  ouster 
of  jurisdiction'  is  invalid,  the  Supreme  Court  of  the  United 
States,"  says  Judge  Hough,  "has  been  able  of  late  years 
to  give  decision  without  ever  going  behind  that  state- 
ment." As  in  Insurance  Co.  v.  Morse,  •where  it  is  said: 
"Agreements  in  advance  to  oust  the  courts  of  the  juris- 
diction conferred  by  law  are  illegal  and  void."  But  even 
Judge  Hough  fails  to  go  back  of  tiie  Federal  and  State 
decisions  to  the  scene  of  original  sin — he  takes  for  granted, 
as  did  Southmayd  in  the  D.  &  H.  Case,  that  the  English  au- 
thorities remain  at  least  precedentially  authoritative.  Tak- 
ing the  federal  authorities  as  they  stand,  however,  he  finds 
"comment  .  .  .  superfluous  upon  any  theory  of  law  (if 
law  be  justice)  that  can  come  to  such  conclusions."  To 
support  the  effort  of  "the  contract  breaker  who  sued 
when  he  had  promised  not  to"  outrages  this  judge's  sense 
of  equity  as  it  did  Lord  Eldon's  in  Waters  v.  Taylor  and 

^Oregon,  etc.,  Banh  v.  American,  etc.,  Co.    (C.  C),  35  Fed.  22; 
and  Tobey  v.  County  of  Bristol,  3  Story  800,  Fed.  Cas.  No.  14,065. 
«20  Wall.  445,  22  L.  Ed.  365. 
•94  U.  S.  535,  24  L.  Ed.  148. 
»  (C.  C.)  16  Fed.  513. 


DEVELOPMENT  IN  THE  FEDERAL  COURTS    245 

Harcaurt  v.  Ranishottom,  though,  curiously  enough,  these 
decisions  (like  many  others  which  we  have  reviewed  in 
preceding  pages)  do  not  seem  to  have  heen  brought  to  the 
attention  of  this  modern  equity  judge.  In  fact,  the  only 
English  cases  to  which  Judge  Hough  refers  are  Thompson 
V.  Charnock  (false  precedent),  Dawson  v.  Fitzgerald  (false 
precedent),  and  the  modern  cases  of  Hamlyn  v.  Talisher 
Distillery  Co.,  Manchester  Ship  Canal  Co.  v.  Pearson  & 
Son,^^  and  Austrian-Lloyd  Co.  v.  Gresham,  etc.,  Society.^^ 
.Due  to  this  absence  of  complete  historical  analysis  of  the 
English  cases,  Judge  Hough  falls  into  the  same  error  as 
does  Mr.  Rosenbaum,^^  in  believing  that  it  is  the  English 
Arbitration  Act  of  Parliament  which  "has  compelled  the 
courts  of  that  country  to  abandon  the  doctrine  that  it 
is  wrong  or  wicked  to  agree  to  stay  away  from  the  courts 
when  disputes  arise."  Thus  he  concludes  that  "It  is 
highly  characteristic  of  lawyers  that,  when  thiLs  coerced  by 
the  Legislature,  the  wisdom  of  previous  decisions  begins 
to  be  doubted."  He  quotes  from  Lord  Watson  in  the 
Talisker  Distillery  case:  "The  rule  that  a  reference  to 
arbitrators  not  named  cannot  be  enforced  does  not  appear 
to  me  to  rest  on  any  essential  considerations  of  public 
policy.  Even  if  an  opposite  inference  were  deducible 
from  the  authorities  by  which  it  was  established,  the  rule 
has  been  so  largely  trenched  upon  by  the  legislation  of 
the  last  50  years  .  .  .  that  I  should  hesitate  to  affirm  that 
the  policy  upon  which  it  was  originally  based  could  now 
be  regarded  as  of  cardinal  importance."  And  he  finds  that 
"Neither  the  Legislature  of  New  York  nor  the  Congress 
has  seen  fit  thus  to  modernize  the  ideas  of  the  judges  of 
their  respective  jurisdictions."  But  if  Judge  Hough  had 
found,  as  is  the  fact,  that  the  early  English  cases  were 

"L.  R.   [1900]   2  Q.  B.  606. 
"L.  R.   [1903]    1  K.  B.  249. 

"Samuel  Rosenbaum:    "A  Report  of  Commercial  Arbitration  in 
England."     Bulletin   XII,   American   Judicature  Society. 


246  COMMERCIAL  ARBITRATION 

not  truly  authoritative  and  that  it  was  the  English  Courts, 
not  the  English  Parliament,  who  changed  the  Common  Law 
of  England  (though  their  change  of  heart,  we  must  ad- 
mit, was  somewhat  accelerated  by  Acts  of  Parliament)  he 
would  surely  not  have  chided  Congress  or  our  State  legis- 
latures so  severely.  For  since  "the  question,"  as  he  finds 
it,  "is  one  of  remedy,  and  not  of  right,"  no  harm  could 
have  come  through  judicial  correction  of  this  judicial  er- 
ror. The  judicial  error  itself  is  nowhere  better  stated 
than  by  Judge  Hough  himself: 

"Whatever  form,"  says  he,  "of  statement  the  rule 
takes,  the  foregoing  citations  show  that  it  always  amounts 
to  the  same  thing,  viz.:  The  courts  will  scarcely  permit 
any  other  body  of  men  to  even  partially  perform  judicial 
work,  and  will  never  permit  the  absorption  of  all  the  busi- 
ness growing  out  of  disputes  over  a  contract  by  any  body 
of  arbitrators,  unless  compelled  to  such  action  by  statute. 
Even  such  cases  as  Mittenthal  v.  Mascagni,  183  Mass.  19, 
66  N.  E.  425,  60  L.R.A.  812,  97  Am.  St.  Rep.  404,  show 
no  more  than  a  belated  acceptance  of  the  right  to  con- 
fine litigation  by  contract  to  a  particular  court,  for  even 
that  opinion  does  not  recognize  the  right  of  mankind  to 
contract  themselves  out  of  all  courts." 

Finally,  the  judge  is  driven  to  what  he  regards  as  the 
sole  question  in  the  case  before  him:  Shall  he  overrule 
the  United  States  Supreme  Court  though  he  believe  it  to 
be  clearly  in  error,  or  shall  he  let  the  United  States  Su- 
preme Court  reverse  itself?  He  has  onl}'-  to  decide,  as  he 
sees  it,  "whether  the  law  as  laid  down  by  the  Supreme 
Court  of  the  United  States"  shall  be  followed  or  not. 
And  his  answer  is  this :  "It  was  within  the  power  of  that 
tribunal  to  make  this  rule.  Inferior  courts  may  fail  to 
find  convincing  reasons  for  it;  but  the  rule  must  be 
obeyed,"  and  thus,  against  his  will,  he  is  compelled  to 
award   judgment  to  the  "contract-breaker." 

This  case,  decided  by  Judge  Hough  in  1915,  wsis  an 


DEVELOPMENT  IN  THE  FEDERAL  COURTS    247 

Admiralty  case.  Just  as  the  lawyers  in  that  case  failed 
to  dig  deeply  into  the  sources  of  the  original  judicial 
error,  so  apparently  they  failed  to  bring  to  Judge  Hough's 
attention  the  case  of  Toledo  S.  S.  Co.  v.  Zenith  Transp.  Co., 
also  in  Admiralty,  decided  in  1911,  by  the  Federal  Cir- 
cuit Court  of  Appeals  in  the  Sixth  Circuit.^*  Here  three 
judges  (Warrington,  Denison  and  Hollister)  refused  to 
permit  the  "contract-breaker"  to  win  out.  "It  is  to  be 
gathered  from  the  contract  of  submission  and  the  subse- 
quent agreements  that  the  parties  intended  a  hona  fide 
determination  of  the  question  of  fault  and,  as  incidental 
thereto,  the  amount  of  damages  the  defeated  party  should 
pay.  "What  kind  of  arbitration  would  it  be,  if  each  party, 
solemnly  in  writing  pledging  himself  to  its  terms,  could 
nevertheless  destroy  it  by  revocation  after  the  real  ques- 
tion in  controversy  were  decided  against  him?  If  he 
could  do  this  once,  he  could  do  it  on  resubmission,  and, 
if  on  resubmission  the  question  were  decided  the  other 
way,  the  then  defeated  party  might  revoke.  The  ethical 
impropriety  of  the  defeated  owner's  revocation,"  writes 
Judge  Hollister  for  the  Court,  "at  such  a.  stage  in  the 
proceedings  is  oivious  and  will  not  he  sanctioned  hy  a 
court  except  under  the  compulsion  of  rules  of  law  clearly 
applicable."  The  Court  made  a  short  excursion  into  the 
English  cases,  touching  Vynior,  Mills  v.  Bayley  and  North- 
Oimpton  Gaslight  Co.  v.  Parnell,  quoting  from  the  latter 
Maule's  famous  paragraph: 

"The  old  rule  upon  which  it  was  held  that  the  power 
of  an  arbitrator  was  revocable  was  that  a  power  not  coup- 
led with  an  interest  was  revocable — revocable  by  the  au- 
thority which  created  it.  From  that  rule  it  was  inferred — 
erroneously,  as  I  think — that  one  of  the  parties  to  a  sub- 
mission might  revoke  without  the  other.  It  seems  to  me 
that  was  allowing  one  man  to  affect  the  interests  of  an- 
other.    But  it  was  an  inveterate  error." 

"184  Fed.  Eep.  391,     Italics  ours. 


^48  COMMERCIAL  ARBITRATION 

It  adopts  the  reasoning  in  Harcourt  v.  Bamshottom  and 
Tope  V.  Lord  Duncannon,^^  wherein  the  Court  said:  "I 
say  that  a  Plaintiff  is  not  at  liberty  to  ask  the  aid  of  a 
court  of  equity  in  respect  of  an  act  done  by  him  against 
good  faith"  and  as  "there  is  nothing  whatever  to  show 
that  the  power  which  the  Plaintiffs  had  given  to  the  ar- 
bitrators was  revoked  upon  any  just  or  reasonable  grounds, 
I  am  bound  to  conclude  that  the  revocation  was  a  tvan- 
ton  and  capriciQus  exercise  of  authority  on  their 
parts.  ..." 

Since  Courts  of  Admiralty  deal  "with  causes  upon  con- 
siderations even  more  elastic  than  pertain  to  the  broad 
jurisdiction  of  Courts  of  Chancery,"  this  Federal  Court 
refuses  to  permit  the  plaintiff  to  plead  his  own  "un- 
ethical conduct"  as  a  basis  for  relief  in  Admiralty. 

It  is  true  that  the  case  rests  upon  several  grounds, 
namely  (a)  that  the  submission  was  not  subject  to  revo- 
cation; (b)  even  if  it  were  subject  to  revocation,  it  could 
not  be  revoked  after  the  award  was  published  (which  was 
the  fact  in  the  case  under  consideration) ;  and  lastly,  (c) 
that  in  its  nature  the  agreement  under  review  did  not 
constitute  "an  arbitration  under  the  strict  rules  of  the 
Common  Law."  Nevertheless,  Judge  Hough  might  well 
have  adopted  the  reasoning  of  Judge  Hollister  in  the 
Zenith  Case  and  treated  it  as  an  authoritative  decision  in 
Admiralty,  for  denying  relief  to  him  who  had  done  "an 
unethical  thing."  "We  are  brought,"  says  Judge  Hollis- 
ter, "to  this  conclusion  by  a  number  of  considerations, 
the  chief  of  which  is  that  justice  and  fair  dealing  "between 
man  and  man  require  it."  ^^ 

"The  appellant  invokes  the  aid  of  this  court  to  fix  the 
fault  of  the  collision  upon  the  respondent.  He  sets  at 
naught,  as  if  it  never  existed,  the  solemn  agreement  he 
made  that  the  question  of  fault  should  be  decided  by  ar- 

»9  Sim.  177,  at  pp.  179-180.     Italics  ours, 
"184  Fed.  Eep.  391,  at  p.  395. 


DEVELOPMENT  IN  THE  FEDERAL  COURTS    249 

bitration.  That  question  was  settled  against  him  by  his 
own  tribunal.  He  would  have  this  court  declare  the  ar- 
bitration a  futility.  If  it  is  a  futility  it  is  only  because 
he  has  made  it  so.  He  will  not,  in  a  court  of  admiralty, 
be  permitted  to  take  such  advantage  of  his  own  wrong.  "^^ 

Nor  was  Judge  Hough's  attention  called  to  the  unpub- 
lished decision  of  his  colleague,  Judge  Ward,  in  the  case 
of  Clark  v.  Hamburg-American  Packet  Company,  granted 
April  15,  1913.  The  decision  is  quite  short  and  is  worth 
publishing  in  full: 

"The  stipulation  in  the  charter  party  that  all  disputes 
were  to  be  settled  by  unnamed  arbitrators  in  London  was 
not  a  provision  regulating  the  remedy  incidental  to  the 
contract,  but  was  a  substantive  part  of  the  contract  itself. 
If  the  charter  had  been  made  in  New  York  such  a  pro- 
vision would  not  be  valid,  Delaware  &  Hudson  Canal  Co. 
V.  Penna.  Coal  Co,,  50  N.  Y.  250.  But  the  demurrer  ad- 
mits that  the  charter  was  made  in  Germany  between  a 
German  corporation  and  a  citizen  of  the  State  of  New 
York  and  that  the  provision  as  to  arbitration  is  valid  by 
the  law  of  Germany.  The  principal  dispute  is  whether 
the  defendant  should  have  supplied  a  la  carte  dinners,  as 
distinguished  from  table  d'hote  dinners.  If  this  was  a 
breach  of  the  contract  it  was  a  breach  committed  on  the 
ship,  which  is  a  part  of  German  territory  and  generally 
while  on  the  high  seas.  Arbitration  of  particular  con- 
troversies is  recognized  under  certain  conditions  in  New 
York,  Code  of  Civil  Proc.  Sees.  2365-2386.  I  think  this 
provision  in  the  contract  is  a  good  plea  in  bar  to  an  ac- 
tion in  the  courts  of  this  state,  Hamlyn  v.  Talisker  (1894) 
App.  Cas.  202.    The  demurrer  is  overruled  with  costs." 

Turning  now  to  the  leading  United  States  Supreme 
Court  case  (Insurance  Co.  v.  Morse,  20  Wall.  445),  we 
find  (at  p.  451)  Mr.  Justice  Hunt  saying: 

"There  is  no  doubt  of  the  general  principle  that  parties 

"Ibid.,  p.  400. 


250  COMMERCIAL  ARBITRATION 

cannot  by  contract  oust  the  ordinary  courts  of  their 
jurisdiction," 

This  quotation  is  from  Scott  v.  Avery  and  includes  the 
famous  quotation  from  Thompson  v.  Charnock  (Lord  Ken- 
yon)  "that  the  fact  that  the  parties  had  agreed  that  the 
matter  should  be  settled  by  arbitration  did  not  oust  the 
jurisdiction  of  the  courts." 

Here,  then,  is  the  source  of  error  in  the  United  States 
Supreme  Court:  the  erroneous  interpretation  of  Scott  v. 
Avery  and  the  treatment  of  Thompson  v.  Charnock  as  au- 
thoritative— almost  the  precise  error  made  by  the  Court 
of  Appeals  in  50  N.  Y.  The  decision  in  Insurance  Co.  v. 
Morse  was  rendered  in  1874,  at  a  time  when  the  English 
authorities  were  still  in  confusion;  but  it  has  been  re- 
peatedly cited  and  followed  without  attempt  to  correct 
the  error. 

Perhaps  no  author  is  more  frequently  quoted  in  this 
country  than  Story  for  the  erroneous  doctrine  we  are 
considering.  Citing  Street  v.  Righy,  Thompson  v.  Char- 
nock, Waters  v.  Taylor  and  Wellington  v.  Mackintosh  and 
ignoring  all  the  other  English  authorities,  he  said  in  his 
Equity  Jurisprudence  (§670)  that  "where  the  stipula- 
tion, though  not  against  the  policy  of  the  law,  yet  is  an 
effort  to  divest  the  ordinary  jurisdiction  of  the  common 
tribunals  of  justice,  such  as  an  agreement,  in  case  of 
any  disputes,  to  refer  the  same  to  arbitrators.  Courts  of 
Equity  will  not,  any  more  than  Courts  of  Law,  interfere 
to  enforce  that  agreement,  hut  they  will  leave  the  parties 
to  their  own  good  pleasure  in  regard  to  such  agreements" 
— a  doctrine  so  unsound  as  to  shock  every  modern  stu- 
dent of  equity.  Why  should  a  court  of  equity  encour- 
age "contract  breakers"?  Because,  says  Judge  Story, 
"The  regular  administration  of  justice  might  be  greatly 
impeded  or  interfered  with  by  such  stipulations  if  they 
were  specifically  enforced.  And  at  all  events  courts  of 
justice   are   presumed   to   be   better   capable   of  adminis- 


DEVELOPMENT  IN  THE  FEDERAL  COURTS    251 

tering  and  enforcing  the  real  rights  of  the  parties  than 
any  mere  private  arbitrators,  as  well  from  their  superior 
knowledge  as  their  superior  means  of  sifting  the  contro- 
versy to  the  very  bottom. "  It  is  true  that  courts  of  equity 
may  do  more  exact  justice  than  arbitrators.  But  why 
limit  its  jurisdiction?  AVhy  not  let  equity  revise  all  busi- 
ness contracts?  It  could,  no  doubt,  make  more  equitable 
bargains  than  the  parties  themselves,  and  certainly  would 
avoid  many  of  the  blunders  that  are  made  by  busines.s 
men. 

Again,  he  puts  it  (§1457)  that  courts  of  equity  will 
not  enforce  the  specific  performance  of  an  agreement  to 
arbitrate,  "deeming  it  against  public  policy  to  exclude 
from  the  appropriate  judicial  tribunals  of  the  State  any 
persons  who,  in  the  ordinary  course  of  things,  have  a  right 
to  sue  there,"  for  which  he  cites  Kill  v.  Hollister,  Mitchell 
V.  Harris,  and  Street  v.  Righy — all,  as  we  have  seen,  re- 
versed and  unsound  precedents.  That  these  were  the 
sources  of  Judge  Story's  error  appears  further  from  a 
study  of  Toley  v.  County  of  Bristol,  decided  in  1845  ^^ 
(Mass.),  wherein  he  cites  all  of  these  cases  as  well  as 
Thompson  v.  CharnocJc.  "No  one  can  be  found,  as  I 
believe,"  said  he,  "and  at  all  events,  no  case  has  been  cited 
by  counsel,  or  has  fallen  within  the  scope  of  my  researches, 
in  which  an  agreement  to  refer  a  claim  to  arbitration, 
has  ever  been  specifically  enforced  in  equity.  So  far  as 
the  authorities  go,  they  are  altogether  the  other  way."  In 
this,  the  great  and  learned  author  was  in  error,  as  he 
was  in  his  reasoning. 

Yet  he  did  not  regard  such  agreements  as  against  pub- 
lic policy.  "The  argument  at  the  bar  misconceived  the 
doctrine  of  the  Court  on  this  head.  Courts  of  equity  do 
not  refuse  to  interfere  to  compel  a  party  specifically  to 
perform  an  agreement  to  refer  to  arbitration,  because 
they  wish  to   discourage   arbitrations,   as  against  public 

"3  Story's  Reports  800. 


252  COMMERCIAL  ARBITRATION 

policy.  On  the  contrary,  they  have  and  can  have  no  just 
objection  to  these  domestic  forums,  and  will  enforce,  and 
'promptly  interfere  to  enforce  their  awards  when  fairly  and 
law f idly  m<ide,  without  hesitation  or  question.' '  But  a 
few  sentences  further  on  he  says:  "It  is  certainly  the 
policy  of  the  Common  Law,  not  to  compel  men  to  submit 
their  rights  and  interests  to  arbitration,  or  to  enforce 
agreements  for  such  a  purpose.  Nay,  the  Common  Law 
goes  further,  and  even  if  a  submission  has  been  made 
to  arbitrators,  who  are  named,  by  deed  or  otherwise,  with 
an  express  stipulation,  that  the  submission  shall  be  irrev- 
ocable, it  still  is  revocable  and  countermandable,  by  either 
party,  before  the  award  is  actually  made,  although  not 
afterwards."  "This,"  says  he,  "was  decided  as  long  ago 
as  in  Vynior's  Case  (8  Co.  R.  81,  b.).  The  reason  there 
given,  is,  that  a  man  cannot,  by  his  act,  make  such  au- 
thority, power,  or  warrant,  not  countermandable,  which  is 
by  law,  and  of  its  own  nature,  countermandable";  etc., 
etc.  So  a  great  American  jurist  revives  the  error  of  a 
great  English  jurist  and  Story  adds  to  Coke  the  strength 
of  an  illustrious  name  to  a  fundamentally  unsound  doc- 
trine. "We  are  not  surprised  to  find  him  citing  as  ap- 
proved English  precedents  not  only  our  old  friend,  Vyn- 
ior's Case,  but  Milne  v.  Gratrix,  Clapham  v.  Eigham,  and 
King  v.  Joseph. 


PART  THREE— THE  SOUNDER  DOCTRINE 

CHAPTER  XIX 

THE  COURT'S  JEALOUSY  OP  ITS  OWN  JURISDICTION 

In  "his  study  of  Commercial  Arbitration  in  England/ 
Mr,  Rosenbaum  says:  "In  the  early  days  judges,  as  well 
as  other  court  oflEicers,  were  paid  by  fees  on  the  volume 
of  business  that  came  to  them  and  being  only  human  they 
looked  with  disfavor  upon  any  limitations  on  their  powers. 
It  is  easy  to  appreciate  the  psychology  of  the  legal  max- 
im: 'The  office  of  a  good  judge  is  to  extend  bis  juris- 
diction.* " 

Support  for  this  view,  it  is  true,  is  to  be  found  in  Lord 
Campbell's  remarks  in  Scott  v.  Avery,  which  curiously 
enough  are  not  to  be  found  in  the  reports  of  "House  of 
Lords  Cases,  "2  but  only  in  25  L.  J.  (Exch.)  308,  at  p. 
312  et  seq.  Evidently  the  reporter  did  not  care  to  give 
additional  space  to  these  animadversions.  Lord  Campbell 
stated : 

"Was  such  a  contract  illegal?  It  was  contended  to  be 
illegal  on  the  ground  of  public  policy.  "What  pretence 
was  there  for  that  argument?  The  public  could  not  be 
injured  by  such  a  contract.  There  could  be  no  injury 
to  the  public  in  an  insurance  company  contracting  that 
no  action  should  be  brought  against  it,  the  costs  of  which, 
might  be  ruinous,  but  that  every  dispute  should  be  re- 
ferred to  a  domestic  tribunal  which  might  speedily  and 

^Bulletin  XII,  American  Judicature  Society,  at  p.  19. 
'See  5  H.  L.  C.  811,  at  p.  851. 

253 


254  COMMERCIAL  ARBITRATION 

economically  determine  the  dispute.  Public  policy  seemed 
to  him  to  require  that  such  a  contract  should  be  enforced. 
If  there  were  any  decisions  the  other  way,  he  should 
ask  their  Lordships  to  reverse  them  as  contrary  to  prin- 
ciple. The  doctrine  had  its  origin  in  the  interests  of  the 
Judges.  There  was  no  disguising  the  fact  that,  as  for- 
merly, the  emohmients  of  the  Judges  depended  mainly,  or 
almost  entirely,  upon  fees,  and  as  they  had  no  fixed  salary 
there  was  great  competition  to  get  as  much  as  possible  of 
litigation  into  Westminster  Hall,  and  a  great  scramble  in 
Westminster  Hall  for  the  division  of  the  spoil/'  And  hence 
the  dispute  between  the  different  Courts  about  a  latitat, 
a  capias,  and  a  quo  minus,  the  latitat  bringing  business 
into  the  Court  of  Queen's  Bench,  the  capias  into  the  Court 
of  Common  Pleas,  and  the  quo  minus  into  the  Court  of 
Exchequer.  And  they  had  great  jealousy  of  arbitrations 
whereby  Westminster  Hall  was  robbed  of  those  cases  which 
came  not  into  the  King's  Bench,  nor  the  Common  Pleas, 
nor  the  Exchequer.  Therefore  they  said  that  the  Courts 
ought  not  to  be  ousted  of  their  jurisdiction,  and  that  it 
was  contrary  to  the  policy  of  the  law  to  do  so. "  * 

It  is  true  that  the  earlier  judges  of  England  were  paid 
by  fees  upon  the  volume  of  business  transacted,  as  well 
as  by  salary.  While  during  the  period  from  William  I 
to  Henry  III,  the  people  could  have  justice  administered 
in  the  courts  of  arbitrary  and  potent  lords  (i.  e.  county 
courts),  "It  is  not  remarkable,"  says  Reeves,''  "that  suitors 
coming  to  a  court  under  such  circumstances  should  consent 
to  purchase  the  means  of  redress  by  paying  a  fine.  Upon 
such  terms  was  the  curia  regis  (founded  by  William  the 
Conqueror)  open  to  all  complainants:  and  the  institution 

'  Italics  ours. 

*  This  appears  in  tlie  report  of  the  case  in  25  L.  J.  (Exch.)  at 
p.  313,  but  is  omitted  from  the  report  of  Lord  Campbell's  opinion 
in  5  H.  L.  C. 

'Reeves:   "History  of  English  Law,"  Vol.  I,  p.  87. 


JUDICIAL  JEALOUSY  255 

of  suits  was  eagerly  encouraged  by  the  officers  of  that 
court.  "^ 

"In  the  Great  Roll  of  31  Henry  I,  of  which  a  de- 
scription has  been  already  given,  is  an  entry,  from  which 
Madox  understands,  and  Lord  Campbell  asserts,  that  Geof- 
frey (afterwards  Bishop  of  Durham)  purchased  the  office 
of  chancellor  for  the  sum  of  3006?.  135.  4d."^  "... 
when  it  is  recollected  that  money  was  then  at  least 
fifteen  times  more  valuable  than  it  is  now, ' '  ^  this  entry 
becomes  more  significant. 

"If,  however,  the  entry  in  question  is  to  be  considered 
as  a  proof  that  a  fine  of  that  or  of  larger  amount  was 
imposed  by  the  king  on  a  grant  of  the  office  of  chancellor, 
it  would  demonstrate  that  its  dignity  and  importance  had 
been  greatly  increased,  and  that  its  emoluments  must  be 
estimated  at  a  very  considerable  standard,  to  be  at  all 
proportionate  to  the  assumed  price.  What  those  emolu- 
ments were  cannot  now  be  ascertained:  but  from  the  roll 
referred  to,  some  of  the  payments  and  allowances  made  to 
the  chancellor  may  be  discovered.  .  .  .  He  received  fifty 
marks  from  a  fine  imposed  on  the  abbot  of  Westmin- 
ster. .  .  ."» 

Foss  tells  us  further  that  "One  of  the  first  acts  of 
King  John  after  the  coronation  was,  'at  the  instance'  of 
his  new  chancellor  Hubert,  to  issue  an  ordinance  (Rymer's 
Fcedera,  i.  75)  regulating  the  fees  of  the  Chancery  on 
charters,  confirmations,  and  protections,  which  had  been 
oppressively  increased  'more  from  inclination  than  rea- 
son' in  the  time  of  Richard.  By  this  document  a  fee  is 
established  for  the  use  of  the  chancellor  of  one  mark  of 
gold  or  ten  marks  of  silver  on  a  new  charter,  and  of  one 
mark  of  silver  on  a  simple  confirmation;  and  for  the  use 

*  See  Reeves :  '  *  History  of  English  Law, ' '  Vol.  I,  pp.  286-7,  note  a, 
buying  of  writs   (Henry  III). 

^Foss:  "Judges  of  England,"  Vol.  I,  p.  82. 
^Ibid.,  Vol.  I,  p.  83. 
"Ibid.,  Vol.  T,  p.  84-85. 


256  COMMERCIAL  ARBITRATION 

of  the  vice-chancellor,  of  one  mark  of  silver  on  the  for- 
mer, and  of  one  bezant  on  the  latter. ' '  ^^  Again,  ' '  The  sale 
of  the  Chancery  to  Walter  de  Grey  in  1205  is  proved  by 
the  following  entry  on  the  Fine  Roll: 

"  ^Walterus  de  Gray  dat  Domino  Begi  quinque  millia 
rnarcas  pro  hahenda  Cancellaria  Domini  Regis  tola  vita 
SIM  et  pro  hahenda  inde  Carta  Domini  Regis.  .  .  .'  "  ^'^ 

''The  fees  of  the  Chancery,  even  under  the  new  regula- 
tions just  mentioned,  must  still  have  teen  very  consid- 
erable to  have  warranted  the  demand  of  so  large  a 
fine."^"- 

"The  daily  salary  of  the  chancellor,  noticed  in  the 
preceding  reigns,  seems  to  have  been  discontinued  towards 
the  latter  end  of  this  (Henry  III)  ;  when  an  annual  sal- 
ary was  attached  to  the  office.  The  first  chancellor  who 
was  paid  under  this  new  arrangement  was  Walter  de  Mer- 
ton,  who,  in  1261,  had  a  grant  of  four  hundred  marks  per 
annum.  .  .  .  This  allowance  was  increased  in  1265,  when 
Thomas  de  Cantilupe  was  chancellor,  to  five  hundred 
marks ;  the  words  of  application  being  still  more  dis- 
tinct, 'ad  sustentationem  suam  et  clericorum  Cancellarim 
nostrce'.  .  .  . 

**Out  of  this  allowance,  therefore,"  says  Foss,  "the 
chancellor  had  to  pay  the  clerks  of  the  Chancery;  but  as 
we  do  not  know  their  number,  nor  the  amount  of  their 
salaries,  we  cannot  calculate  what  balance  remained  to 
the  chancellor  himself.  Whatever  it  was,  it  must  have 
been  greatly  increased  by  the  fees  to  which  he  was  en- 
titled. 

"We  are  enabled,  in  some  measure,  to  estimate  the 
amount  of  these  fees  by  the  return  to  which  I  have  al- 
ready adverted  in  the  time  of  Richard  de  Middleton,  when 
John  le  Fauconer  accounted  for  them  to  the  king.  The 
total  receipt  for  two  years  was  973^  16s.     The  disburse- 

'Toss:   ".Judgoa  of  England,"  Vol.  II,  p.  21. 
"Ibid.,  Vol.  n,  p.  22. 


JUDICIAL  JEALOUSY  257 

ments  are  not  fully  given,  but  as  those  named  amount 
only  to  the  trifling  sum  of  191.  6s.  Sy^d.,  we  may  pre- 
sume that  the  whole  deduction  would  not  exceed  the  odd 
sum  of  131.  16s.  Thus  there  would  be  an  annual  bal- 
ance of  4:501.  for  the  chancellor,  which,  with  his  share 
of  the  salary  after  paying  the  clerks  of  the  Chancery,  and 
the  other  advantages  arising  from  the  office,  would  form  an 
aggregate  not  much  less  in  value  than  the  income  now 
attached  to  it."^^ 

"Both  Hugh  Bigot  and  Philip  Basset  had  had  a  yearly 
allowance  of  one  thousand  marks  for  their  support  as 
chief  justiciaries :  but  Robert  de  Brus  .  .  .  had  the  grant 
of  a  salary  of  one  hundred  marks  only. 

"...  the  allowance  to  the  other  judges  never  exceed- 
ing 40Z.,  and  sometimes  being  limited  to  20?,  per  an- 
num. ' '  ^' 

"It  was  not  uncommon  to  reward  the  judges  by  grants 
of  land.  .  .  ."^* 

"Of  the  salary  paid  to  the  barons  in  this  reign  we 
have  only  a  few  examples.  Soon  after  Alexander  de  Swere- 
ford's  appointment,  in  18  Henry  III,  he  had  forty  marks 
per  annum,  and  it  was  not  increased  in  27  Henry  III. 
In  38  Henry  III  John  de  Wyville  had  only  twenty 
marks,  but  this,  perhaps,  was  as  justice  of  the 
Jews;  and  Roger  de  la  Leye  and  William  de  Clifford 
had  401.  a  year  allowed,  in  49  and  55  Henry  III,  each 
being  at  the  respective  times  chancellor  of  the  Excheq- 
uer."" 

In  Edward  I's  reign  (1272-1307)  "The  robes  of  the 
judges  were  still  supplied  by  the  crown,  but  their  sal- 
aries seem  to  have  been  reduced  in  this  reign.  The  100 
marks,  allowed  by  Henry  III  to  Gilbert  de  Preston  as  the 

^'Ibid.,  Vol.  II,  pp.  149-150. 
"Ibid.,  Vol.  II,  pp.  155-156. 
"76id.,  Vol.  II,  p.  189. 
»/&tU,  Vol.  II,  p.  199. 


258  COMMERCIAL  ARBITRATION 

head  of  the  Court  of  Common  Pleas,  was  continued  to 
him  during  his  life;  but  his  successors,  chief  justices  of 
either  court,  were  not  paid  even  to  that  extent  of  stinted 
liberality,  none  of  them  receiving  more  than  60  marks  or 
40Z,  a  year. 

"There  was  some  little  difference  in  the  payments  made 
to  the  other  judges  of  the  two  courts;  50  marks  being 
given  to  a  few,  and  40  marks  to  the  remainder. 

"That  the  barons  of  the  Exchequer  held  a  lower  grade 
than  the  judges  of  the  two  other  courts  is  evident  from 
the  amount  of  their  salaries  being  limited  to  201.  or  30 
marks  a  year,  which,  to  some  of  them,  was  increased, 
towards  the  end  of  the  reign,  to  40  marks. 

"Making  every  allowance  for  the  difference  in  the  value 
of  money,"  says  Foss,  "such  stipends  must  have  been 
wholly  inadequate  for  the  support  of  these  officers;  and 
if  the  deficiency  was  to  be  made  up  by  fees  in  every 
variety  of  form,  we  can  scarcely  be  surprised  that  the 
anxiety  to  increase  them  should  sometimes  look  like  ex- 
tortion, and  that  this  temptation  to  bribery  should  now  and 
then  overcome  their  virtue."^® 

"The  salary  of  the  chief  justices  of  both  benches 
(King's  Bench  and  Common  Pleas),  at  the  beginning  of 
the  reign  (Edward  III),  was  40?.  each,  and  that  of  other 
judges  40  marks  each.  The  latter  stipend  was  all  that 
was  then  given  to  the  chief  baron  and  his  associates  in 
the  Exchequer. 

"By  Stat.  20  Edward  III,  chap.  1,  after  enacting  that 
the  judges  are  to  take  no  reward  from  any  one  but  the 
king,  it  is  especially  stated  that  '  for  this  cause  we  have  in- 
creased the  fees  (les  feez)  of  the  same  our  justices,  in  such 
manner  as  it  ought  reasonably  to  suffice  them." 

''The  word  'fee'  in  the  statute  evidently  meant  the  sal- 
ary paid  to  them  by  the  king,  that  being  the  ordinary 
"Foss:  "The  Judges  of  England,"  Vol.  Ill,  p.  44. 


JUDICIAL  JEALOUSY  259 

name  given  to  it;  and  had  no  reference  to  any  larger  pay- 
ments to  which  the  judges  were  entitled  on  proceedings 
before  them."  " 

"  'That  the  king's  servants  were  miserably  underpaid,' 
says  Mr.  Hall,  'was  admitted  even  then,  and  yet  it  was 
notorious  that  in  most  cases  they  were  able  to  amass  con- 
siderable fortunes.  There  could  be  little  doubt  where  the 
money  came  from,  and  the  crown  by  accepting  large  fines 
for  the  grant  of  offices  which  carried  with  them  no  legit- 
imate emoluments  worth  speaking  of,  must  be  regarded 
as  deliberately  conniving  at  the  robbery  of  the  subjects.' 
The  absence  of  Edward  between  1286  and  1289  brought 
matters  to  a  crisis.  He  was  met  upon  his  return  with 
such  loud  complaints  that  he  appointed  a  commission  of 
enquiry.  The  chancellor,  Robert  Burnell,  was  at  its  head, 
and  with  him  were  associated  six  other  commissioners. 
Writs  were  sent  out  to  all  the  sheriffs  in  England  di- 
recting all  who  had  any  complaints  against  royal  offi- 
cials to  come  and  make  them  at  Westminster.  The  result 
was  disgraceful  to  all  branches  of  the  civil  service,  and 
especially  to  the  bench.  It  constitutes,  to  use  Professor 
Maitland's  words,  'our  one  great  judicial  scandal.'  Of 
the  judges  of  the  court  of  King's  Bench  two  out  of 
three  were  removed;  of  the  judges  of  the  court  of  Com- 
mon Pleas  four  out  of  five.  The  only  two  judges  in  these 
two  courts  found  to  be  guiltless  were  John  de  Meting- 
ham  and  Elias  de  Beckingham.  Five  of  the  itinerant  jus- 
tices, Adam  de  Stratton,  chamberlain  of  the  Exchequer, 
Henry  de  Bray,  an  escheator,  Robert  de  Lyttelbury,  clerk 
or  master  of  the  rolls,  and  a  host  of  minor  officials  were 
all  found  guilty  of  various  crimes. ' '  ^^ 

But  whether  Lord  Campbell 's  strictures  upon  his  prede- 
cessors in  Westminster  Hall  were  justified  or  not,  it  is 

"Ibid.,  Vol.  Ill,  p.  357. 

'»W.  S.  Holdsworth,  "A  History  of  English  Law,"  Vol.  II,  pp. 
239-240. 


260  COMMERCIAL  ARBITRATION 

certainly  not  true  of  modern  courts  that  they  strain  or 
over-reach  themselves  to  secure  jurisdiction  of  controversy. 
If  for  no  other  reason,  the  pressure  of  modem  judicial 
work,  the  diflSculty  of  disposing  even  of  the  business  in 
hand,  stren^hens  the  impulse  to  decline  jurisdiction  if 
legitimate  ground  therefor  can  be  found.  In  our  day, 
there  is  little  evidence  of  jealousy  on  the  part  of  the 
courts  over  the  disposition  of  controversy  by  private  tri- 
bunals. 

In  a  ''Preliminary  Report  on  Efficiency  in  the  Ad- 
ministration of  Justice,"  prepared  by  Charles  W.  Eliot, 
Moorfield  Storey,  Louis  D.  Brandeis,  Adolph  J.  Roden- 
beck  and  Roscoe  Pound  for  The  National  Economic  League, 
it  is  said: 

"The  great  increase  of  litigation  involved  in  the  expan- 
sion of  commerce  and  industry  and  the  rapid  growth  of 
population  has  crowded  the  calendars  of  our  courts  to 
such  an  extent  as  to  preclude  the  thoroughness  in  dis- 
cussion by  counsel  and  the  deliberation  in  study  by  the 
court  which  is  required  in  a  constructive  period.  .  .  . 
The  highest  type  of  judicial  law-making  may  not  reason- 
ably be  expected  under  such  circumstances." 

In  addressing  the  Chamber  of  Commerce  on  June  1, 
1911,  Judge  Vernon  M.  Davis,  now  a  member  of  the 
Appellate  Division  of  the  Supreme  Court  of  New  York 
for  the   First  Department,  said : 

"I  also  congratulate  this  Chamber  of  Commerce  upon 
bringing  again  into  existence  a  simple  and  effective  plan 
for  settling  business  disagreements  without  resort  to  the 
courts.  In  this,  as  in  many  other  things,  the  Chamber 
has  maintained  its  character  of  being  alive  to  all  public 
needs,  and  has  performed  an  important  public  service. 
Why  should  business  men  undertake  long  and  expensive 
litigation  over  ordinary  differences  arising  between  them? 
I  think  it  must  be  a  habit,  and  a  bad  habit,  too.  I  am 
hopeful  to  predict,  and  I  appeal  to  your  experience  to 


JUDICIAL  JEALOUSY  261 

justify  that  prediction,  that  a  very  large  number  of  the 
disputes  that  are  now  carried  to  the  courts  will  be  set- 
tled speedily  and  inexpensively  under  the  scheme  of  ar- 
bitration which  has  just  been  adopted  by  this  Cham- 
ber. .  .  . 

"The  plan  adopted  by  the  Chamber  is  in  no  sense  in 
competition  with  the  courts,  nor  can  it  be  justly  regarded 
as  a  protest  against  any  real  or  fancied  delay  in  the  ad- 
ministration of  justice  in  this  city.  It  has  arisen  out  of 
an  obvious  condition  of  business  life  here,  the  obvious  fact 
that  it  is  practicable  to  avoid  the  delay  and  expense  of  a 
suit  in  court  by  a  resort  to  arbitration,  and  the  courts 
look  upon  these  settlements  with  great  favor,  and  it  is 
the  policy  of  the  law  to  encourage  arbitration,  so  much 
so  that  by  special  statute  the  awards  of  arbitrators  may 
become  the  judgment  of  the  Supreme  Court,  judgments  of 
as  high  a  sanction  as  those  obtained  in  the  formal  litiga- 
tion in  the  courts." 

The  tendency  of  our  day  is  expressed  in  Jackson  v. 
Barry  Eailway  Company  (1893).^^  Here  there  was  a 
reference  to  an  arbitrator  to  determine  whether  or  not 
work  done  under  a  contract  was  an  "extra"  or  not,  and 
the  engineer  in  charge  of  the  work  was  named  as  the 
arbitrator.  Bowen,  L.  J.  (the  opinion  has  been  frequently 
quoted)  ^°  says:  "It  is  no  part  of  our  duty  to  approach 
such  curiously-coloured  contracts  with  a  desire  to  upset 
them  or  to  emancipate  the  contractor  from  the  burden  of 
a  stipulation  which,  however  onerous,  it  was  worth  his 
while  to  agree  to  bear.  To  do  so,  would  be  to  attempt  to 
dictate  to  the  commercial  world  the  conditions  under  which 
it  should  carry  on  its  business." 

The  most  interesting  and  erudite  question  of  law  may 
be  implicit  in  a  family  controversy  over  a  will ;  but  if  the 

»L.  E.   [1893]    1  Ch.  238. 

^  See  The  Justice  of  the  Peace  (London),  Vol.  15,  p.  291  (June 
24,  1911). 


262  CO]\IMERCIAL  ARBITRATION 

parties  are  of  age  and  do  not  fraudulently  impose  upon 
each  other,  they  may,  by  the  taking  of  no  more  formid- 
able steps  than  the  interchange  of  a  few  dollars  and  the 
delivery  of  mutual  releases,  dispose  of  the  question  for- 
ever and  foreclose  the  courts  from  ever  passing  upon  it. 
Serious  questions  of  constitutional  law,  involving  large 
matters  of  public  policy,  may  never  reach  the  courts  be- 
cause the  good,  practical  sense  of  the  parties  produces  a 
compromise  upon  other  points.  A  partnership  dispute  pre- 
sents a  very  neat  question  of  law.  With  careful  manage- 
ment it  can  be  made  to  produce  litigation  sufficient  to  sup- 
port comfortably  a  lawyer  and  his  son  for  a  year  and  a 
day.  Yet  the  partners  compose  their  differences,  with- 
draw the  suit  already  begun,  or,  if  not  begun,  discharge 
the  lawyer  from  all  further  responsibility.  Does  the  court 
intervene  to  set  aside  their  releases  or  waivers  or  settle- 
ments, or  frown  upon  the  transaction  because  it  precludes 
the  court  from  making  some  new  law  or  perhaps,  in  the 
opinion  of  the  court,  even  a  fairer  disposition  of  the  is- 
sues? The  Bench  today  will  commend,  not  condemn,  the 
member  of  the  Bar  who  will  successfully  negotiate  such  a 
result  and  will  thank  him  for  saving  the  Court  some  labor. 
The  Bar  will  approve  his  conduct  in  thus  "preventing  un- 
necessary litigation."  Much  nonsense  is  spoken  about  this 
business  of  ' '  ousting  the  courts  of  jurisdiction. ' '  The  truth 
is,  the  phrase  has  different  meaning  today  than  it  had  in 
the  days  of  Kill  v.  Hollister  ^^  and  Thompson  v.  Charnoch.^'^ 
It  means  today  what  Lord  Gifford  said  it  meant  in  Wilson 
V.  Glasgow  Tramways  Co.-^  "In  common  language  where 
no  attempt  is  made  at  logical  accuracy  it  is  sometimes  said 
that  a  contract  of  submission  or  arbitration  ousts  the 
common  law  jurisdiction  of  all  Judges.  The  parties  have 
chosen  a  private  Judge  for  themselves.     But  this  is  not 

"  See  ante,  p.  153. 
'"See  antr,  p.  166. 
"  (June  22,  1878)  5  Session  Cases  (4th  Series)  981,  at  p.  992. 


JUDICIAL  JEALOUSY  263 

strictly  or  logically  accurate  language,  and,  what  is  more 
important,  it  is  not  the  sense  in  which  the  small  debt  statute 
uses  the  words  'incompetency'  and  'defect  of  jurisdiction.' 
In  strict  language  a  contract  of  arbitration  does  not  destroy 
the  jurisdiction  of  the  common  law  Judge.  It  only  in- 
troduces a  new  plea  into  the  cause  on  which  the  common 
law  Judge  must  decide  by  virtue  of  his  inherent  juris- 
diction. If  he  decides  that  there  has  been  a  valid  contract 
of  arbitration  he  may  take  several  courses.  He  may  dis- 
miss the  action,  leaving  the  parties  to  go  to  their  arbiter 
and  come  back  again,  if  necessary,  for  execution  or  for 
powers,  or  he  may  remit  to  the  arbitrator,  or  suspend  pro- 
ceedings, or  give  effect  to  the  award.  If  the  Common  Law 
Judge  decides  that  there  has  been  no  valid  arbitration,  or 
that  the  award  is  bad,  or  ultra  vires  compromissi,  he  will 
proceed  accordingly;  but  in  dealing  with  arbitrations  and 
awards  the  Judge  is  exercising  his  inherent  jurisdiction, 
and  is  no  way  divested  thereof,  and  that  whether  he  sus- 
tains the  arbitration  and  award  or  whether  he  refuses  to  do 
so  in  whole  or  in  part.  In  short,  the  plea  of  arbitration 
is  a  plea  on  the  merits  of  the  case  which,  if  well-founded, 
will,  indeed,  prevent  the  Judge  from  himself  entering  on 
the  merits  or  going  into  proof,  but  which  will  not  and  can- 
not deprive  him  of  his  jurisdiction.  If  the  award  is  good 
he  will  give  effect  to  it  either  by  ordering  it  to  be  put  in 
execution  or  otherwise.  If  it  is  bad  he  will  disregard  it, 
repel  the  plea  of  arbitration,  and  proceed  with  the  suit 
in  common  form;  but  in  all  cases  he  has  jurisdiction  to 
take  either  course,  and  if  his  jurisdiction  is  not  subject  to 
review  his  decision  will  be  final."  Or  as  Lord  Watson 
said  in  the  House  of  Lords  (May  10,  1894)  :  '-*  "The  juris- 
diction of  the  Court  is  not  wholly  ousted  by  such  a  con- 
tract. It  deprives  the  Court  of  jurisdiction  to  inquire  into 
and  decide  the  merits  of  the  case,  whilst  it  leaves  the  Court 

'*Hamlyn  ^  Co.  v.  Talisker  Distillery,  L.  E.  [1894]  A.  C.  202,  at 
pp.   211-212. 


264.  COMMERCIAL  ARBITRATION 

free  to  entertain  the  suit,  and  to  pronounce  a  decree  in 
conformity  with  the  award  of  the  arbiter.  Should  the  ar- 
bitration, from  any  cause,  prove  abortive,  the  full  juris- 
diction of  the  Court  will  revive,  to  the  effect  of  enabling  it 
to  hear  and  determine  the  action  upon  its  merits.  "When 
a  binding  reference  is  pleaded  in  limine,  the  proper  course 
to  take  is  either  to  refer  the  question  in  dispute  to  the 
arbiter  named  or  to  stay  procedure  until  it  has  been  set- 
tled by  arbitration.  The  latter  course  was  adopted  in 
Caledonian  UaHwoy  Company  v.  Greenock  and  Wemyss 
Bay  Railway  Company,  where  the  reference  was  to  arbiters 
unnamed,  but  had  been  confirmed  by  statute.  I  cite  that 
case,  not  as  establishing,  but  as  illustrating  the  rule  of  pro- 
cedure, which  was  in  force  long  before  its  date,"  Or  as 
Lord  Camijbell  put  it:^^  "Where  an  action  is  indispen- 
sable, you  cannot  oust  the  Court  of  its  jurisdiction  over 
the  subject,  because  justice  cannot  be  done  without  the  ex- 
ercise of  that  jurisdiction.  That  is  all,  and  there  is  no 
doubt  about  that.  This  is  the  foundation  of  the  doctrine 
that  the  Courts  are  not  to  be  ousted  of  their  jurisdiction." 
"^  Scott  V.  Avery,  5  H.  L,  G.  8H,  at  p.  853. 


CHAPTER  XX 

THE   ORDINAEY   UNDERSTANDING   OF   AN  ARBITRATION 

CLAUSE 

The  provision  in  the  ordinary  contract  of  merchants 
that,  in  the  event  of  dispute  or  controversy,  there  shall  he 
submission  to  arbitration,  is  not  intended  to  "oust  the 
courts  of  jurisdiction"  but  is  merely  expressive  of  the  in- 
tent of  the  parties  to  keep  out  of  court  if  they  can  amd  to 
endeavor  to  compose  their  differences  either  through  con- 
ciliation or  arbitration. 

In  Scott  V.  Avery,  Lord  Chancellor  Cranworth  told  us 
that  the  intention  of  the  parties  was  "that  the  sum  to  be 
recovered  should  be  only  such  a  sum  as,  if  not  agreed  upon 
in  the  first  instance  between  the  committee  and  the  suffer- 
ing member,  should  be  decided  by  arbitration,  and  that 
the  sum  so  ascertained  by  arbitration,  and  no  other,  should 
be  the  sum  to  be  recovered."  "And,"  said  he,  "if  thai 
was  their  meaning,  the  circumstance  that  they  have  not 
stated  that  meaning  in  the  clearest  terms,  or  in  the  mcst 
artistic  form,,  is  a  nuitter  utterly  unimportant. ' '  ^  And 
in  Waters  v.  Taylor,  Lord  Eldon  said :  "...  the  forum 
they  have  provided  for  themselves  .  .  .  [it]  shows  their 
intention  against  tlie  interference  of  any  other  jurisdic- 
tion, until  they  have  tried  the  effect  of  the  special  means, 
provided  by  themselves."  ^ 

Now,  whatever  may  be  said  of  arbitration  clauses  in 
general,  when  two  merchants  insert  in  an  ordinary  busi- 
es H.  L.  C.  811,  at  p.  849.    Italics  ours. 
*  15  Vesej  Jr.  10,  at  p.  17.     Italics  ours. 

265 


266  COMMERCIAL  ARBITRATION 

ness  contract  an  arbitration  clause,  they  mean  just  this 
and  nothing  more: 

There  shall  he  no  application  to  the  courts  ''until  they 
have  tried  the  effect  of  the  special  means  provided  hy  them- 
selves.'* 

The  failure  so  to  interpret  such  clauses  and  the  insistence 
upon  some  positive  formula  which  justifies  the  finding  of  a 
condition  precedent  to  a  law  suit,  has  been  due,  we  believe, 
to  three  things,  each  of  which  we  hope  to  establish: 

(a)  Failure  to  apply  the  customs  and  understandings 
of  merchants. 

(b)  Failure  to  apply  the  doctrine  of  Scott  v.  Avery  and 
Halfhide  v.  Fenning. 

(c)  Failure  to  realize  that  the  dictum  in  Vynior's  Case 
had  long  since  lost  its  authority. 

The  two  last  of  these  three  points  we  believe  we  have 
already  established.     The  first  we  shall  now  consider, 

(a)  The  failure  to  apply  the  customs  and  understand- 
ings of  merchants. 

The  study  in  Part  One  should  make  it  clear  that  Lord 
Eldon's  remark  is  true — that  business  men  do  not  mean  to 
oiisi  the  courts  of  jurisdiction  (in  any  logical  sense  of  these 
words)  but  merely  mean  to  establish  in  their  own  way  the 
cause  of  action  which  the  courts  may,  if  need  be,  enforce. 
In  Lord  Coke's  day  it  was  not  understood  differently. 
Only  in  the  later  period  and  in  but  one  case,  Kill  v.  Hollis- 
ter,^  did  such  an  idea  take  root.  Later  study  by  the 
judges  made  this  clearer.  But  there  is  much  evidence  still 
to  submit  to  indicate  beyond  further  question  the  under- 
standing of  present  day  business  men  and  lawyers  of  the 
purpose  of  an  "arbitration  covenant." 

In  the  first  place,,  as  between  business  men  of  foreign 
countries  and  business  men  of  our  country,  at  least  one  of 
the  parties  so  understands  the  contract.  For  today  in 
every  country  on  the  face  of  the  earth,  save  only  our  own, 

•1  Wils.  129. 


THE  ORDINARY  UNDERSTANDING       267 

agreements  to  arbitrate  future  differences  are  irrevocable 
and  of  full  binding  force  in  law.  When  England  found 
her  judges  still  wavering  in  applying  the  full  force  and 
effect  of  Scott  v.  Avery,  she  passed  the  statute  which  now 
makes  such  contracts  binding.*  Today,  as  we  have  seen, 
except  for  war  conditions,  parties  in  England  may  agree 
to  leave  their  disputes  to  determination  by  the  courts  of 
Hungary  or  Germany,  and  this  the  courts  treat  as  an 
arbitration. 

Today  the  London  Court  of  Arbitration  may  say  to  the 
New  York  Chamber  of  Commerce: 

"Recourse  to  arbitration  in  this  Country  is  very  gen- 
eral, and  it  is  a  gratifying  tribute  to  the  efficiency  with 
which  justice  is  administered  in  the  London  Court  of  Arbi- 
tration, that  Foreign  Merchants  readily  assent  to  the  in- 
sertion in  their  contracts  of  a  clause  providing  for  the 
reference  of  differences  thereto." 

So  that  as  to  mercantile  contracts  between  merchants  of 
other  countries  and  merchants  of  our  own,  at  least  one 
of  the  parties  understands  the  covenant  to  be  as  irrevocable 
and  as  enforceable  in  the  courts  as  other  covenants  in  the 
contract. 

Does  our  own  merchant  understand  it  differently? 

In  Hamlyn  &  Co.  v.  Talisker  Distillery,^  the  Lord  Chan- 
cellor says :  ®  "  The  learned  Judges  in  the  Court  below  treat 
the  lex  loci  solutionis  of  the  main  portion  of  the  contract 
as  conclusively  determining  that  all  the  rights  of  the  par- 
ties under  the  contract  must  be  governed  by  the  law  of 
that  place.  I  am  unable  to  agree  with  them  in  this  con- 
clusion. Where  a  contract  is  entered  into  between  parties 
residing  in  different  places,  and  where  different  systems  of 
law  prevail,  it  is  a  question,  as  it  appears  to  me,  in  each  case, 
with  reference  to  what  law  the  parties  contracted,  and  ae- 

*52  and  53  V.  c.  49. 

•21  Session  Cases   (4th  Series)   204. 

'G  The  Reports  188,  at  pp.  193-194. 


268  COMMERCIAL  ARBITRATION 

cording  to  what  law  it  was  their  intention  that  their  rights, 
either  under  the  whole  or  any  part  of  the  contract  should 
be  determined.  In  considering  what  law  is  to  govern,  no 
doubt  the  lex  loci  solutionis  is  a  matter  of  great  importance. 
The  lex  loci  contractus  is  also  of  importance.  In  the  pres- 
ent case  the  place  of  the  contract  was  different  from  the 
place  of  its  performance.  It  is  not  necessary  to  enter  upon 
the  enquiry,  which  was  a  good  deal  discussed  at  the  Bar, 
to  which  of  these  considerations  the  greatest  weight  is  to 
be  attributed,  namely,  the  place  where  the  contract  was 
made,  or  the  place  where  it  is  to  be  performed.  In  my 
view  they  are  both  matters  which  must  be  taken  into  con- 
sideration, but  neither  of  them  is,  of  itself,  conclusive. 
And  still  less  is  it  conclusive,  as  it  appears  to  me,  as  to 
the  particular  law  which  was  intended  to  govern  particular 
parts  of  the  contract  between  the  parties. ...  In  this  case,  as 
in  all  such  cases,  the  whole  of  the  contract  must  be  looked 
at,  and  the  contract  must  be  regulated  by  the  intention  of 
the  parties  as  appearing  from  the  contract.  It  is  perfectly 
competent  to  those  who,  under  such  circumstances  as  I 
have  indicated,  are  entering  into  a  contract  to  indicate  by 
the  terms  which  they  employ,  which  system  of  law  they 
intend  to  be  applied  to  the  construction  of  the  contract, 
and  to  the  determination  of  the  rights  arising  out  of  it. 

''Now  in  the  present  case  it  appears  to  me  that  the 
language  of  the  arbitration  clause  indicates  very  clearly 
that  the  parties  intended  that  the  rights  under  that  clause 
should  be  determined  according  to  the  law  of  England. 
As  I  have  said,  the  contract  was  made  there;  one  of  the 
parties  was  residing  there.  Where  under  such  circum- 
stances the  parties  agree  that  any  dispute  arising  out  of 
their  contract  shall  be  'settled  by  arbitration  by  two  mem- 
bers of  the  London  Com  Exchange  or  their  umpire  in 
the  usual  way,'  it  seems  to  me  that  they  have  indicated  as 
clearly  as  it  is  possible  to  do,  their  intention  that  that  par- 
ticular stipulation,  which  is  a  part  of  the  contract  between 


THE  ORDINARY  UNDERSTANDING       269 

them,  shall  be  interpreted  according  to,  and  governed  by, 
the  law,  not  of  Scotland,  but  of  England ;  and  I  am  aware 
of  nothing  that  stands  in  the  way  of  the  intention  of  the 
parties  thus  indicated  by  the  contract  they  entered  into 
being  carried  into  effect." 

And  Lord  Watson  says :  ^  "  Upon  the  first  of  these  ques- 
tions I  have  been  unable  to  arrive  at  the  same  conclusion 
with  the  Courts  below.  When  two  parties,  living  under 
different  systems  of  law,  enter  into  a  personal  contract, 
which  of  these  systems  must  be  applied  to  its  construction 
depends  upon  their  mutual  intention,  either  as  expressed 
in  their  contract,  or  as  derivable  by  fair  implication  from 
its  terms.  In  the  absence  of  any  clear  expression  of  their 
intention,  it  is  necessary  and  legitimate  to  take  into  ac- 
count the  circumstances  attendant  upon  the  making  of  the 
contract,  and  the  course  of  performing  its  stipulations  con- 
templated by  the  parties ;  and  amongst  these  considerations 
the  lociis  contractus  and  the  locus  s&lutumis  have  always 
been  regarded  as  of  importance,  although  English  and 
Scotch  decisions  differ  in  regard  to  the  relative  weight 
which  ought  to  be  attributed  to  them  when  the  place  of  con- 
tracting is  in  one  forum,^  and  the  place  of  performance  in 
another.  In  the  present  case  it  does  not  appear  to  me  to 
be  necessary  to  discuss  the  relative  value  of  these  considera- 
tions, because,  in  my  opinion,  the  clause  of  reference  is 
expressed  in  terms  which  clearly  indicate  that  the  parties 
had  in  contemplation  and  agreed  that  it  should  be  inter- 
preted according  to  the  rules  of  English  law.  If  they  had 
stipulated  that  all  disputes  arising  out  of  the  contract  were 
to  be  decided  in  the  Court  of  Session  I  should  have  been 
of  opinion  that  they  had  in  view  the  principles  of  Scotch 
law,  and  meant  that  their  mutual  stipulations  should  be 
construed  according  to  these  principles.  And,  to  my  mind, 
their  selection  from  the  membership  of  a  commercial  body 

'  6  The  Reports  188,  at  p.  198. 
•Italics  ours. 


270  CO^IMERCIAL  ARBITRATION 

in  London  of  a  conventional  tribunal  which  is  to  act  'in 
the  usual  way,'  or,  in  other  words,  in  the  manner  which 
is  customary  in  London,  indicates,  not  less  conclusively, 
that,  in  agreeing  to  such  an  arbitration,  they  were  con- 
tracting with  reference  to  the  law  of  England."® 

Lord  Ashbourne  says:^^  "A  contract  which  provided 
that  disputes  should  'be  settled  by  arbitration  by  two  mem- 
bers of  the  London  Corn  Exchange  or  their  umpire  in  the 
usual  way, '  distinctly  introduces  a  reference  to  well-known 
laws  regulating  such  arbitrations,  and  those  must  be  the 
laws  of  England.  This  interpretation  gives  due  and  full 
effect  to  every  portion  of  the  contract,  whereas  the  arbitra- 
tion clause  becomes  mere  waste  paper  if  it  is  held  that  the 
parties  were  contracting  on  the  basis  of  the  application  of 
the  law  of  Scotland  which  would  at  once  refuse  to  acknowl- 
edge the  full  efficacy  of  a  clause  so  framed." 

Again,  the  Lord  Chancellor  (Herschell)  in  this  case 
says :  ^^  "  But  then  it  is  argued  that  an  agreement  to  refer 
disputes  to  arbitration,  deals  with  the  remedy  and  not  with 
the  rights  of  the  parties,  and  that  consequently  the  forum 
being  Scotch,  the  parties  cannot  by  reason  of  the  agree- 
ment into  which  they  have  entered  interfere  with  the  ordi- 
nary course  of  proceedings  in  the  Courts  of  Scotland.  .  .  . 
Stated  generally  I  should  not  dispute  that  proposition  so 
far  as  it  lays  down  that  the  parties  cannot,  in  a  case  where 
the  merits  fall  to  be  determined  in  the  Scotch  Courts,  in- 
sist, by  virtue  of  an  agreement,  that  those  Courts  shall 
depart  from  their  ordinary  course  of  procedure.  But  .  .  . 
that  is  not  really  the  question  which  has  to  be  determined  in 
the  present  case.  The  question  which  has  to  be  determined 
is  whether  it  is  a  case  in  which  the  Courts  of  Scotland  ought 
to  entertain  the  merits  and  adjudicate  upon  them.  If  it 
were  such  a  ease,  then  no  doubt  the  ordinary  course  of  pro- 

»6  The  Reports  188,  at  p.  198, 
^"Ibid.,  p.  201. 
^'Ibid.,  p.  196. 


THE  ORDINARY  UNDERSTANDING       271 

cedure  in  the  Scotch  Courts  would  have  to  be  followed; 
but  the  preliminary  question  has  to  be  determined  whether 
by  virtue  of  a  valid  clause  of  arbitration,  the  proper 
course  is  for  the  Courts  in  Scotland  not  to  adjudicate 
upon  the  merits  of  the  case,  but  to  leave  the  matter  to  be 
determined  by  the  tribunal  to  which  the  parties  have  agreed 
to  refer  it.  .  .  .  Viewed  in  that  light  I  can  see  no  difficulty, 
and  the  argument  that  to  give  effect  to  this  arbitration 
clause  would  interfere  with  the  course  of  procedure  in  the 
forum  in  which  the  action  is  pending,  seems  to  me  entirely 
to  fail."i= 

Lord  Kinnear  said  in  the  same  case:^^  "The  contract 
which  they  made  in  these  circumstances  is  that  disputes 
should  'be  settled  by  arbitration  by  two  members  of  the 
London  Corn  Exchange,  or  their  umpire,  in  the  usual  way. ' 
Now,  when  a  London  merchant  stipulates  that  disputes 
under  his  contract  are  to  be  referred  to  members  of  such 
a  body  as  the  London  Corn  Exchange — that  is,  to  mer- 
chants or  brokers  carrying  on  business  in  the  city  of  Lon- 
don— I  think  that  that  means  that  the  tribunal  is  to  be 
constituted  and  the  arbitration  conducted  in  London;  and 
when  it  is  farther  stipulated  that  the  arbitration  is  to  be 
by  two  members  of  the  Corn  Exchange,  'or  their  umpire, 
in  the  usual  way, '  I  think  that  that  imports  a  reference  to 
a  known  law  and  practice  regulating  the  constitution  and 
conduct  of  such  arhitrations,  and  that  can  only  he  the  law 
and  practice  of  England." 

English  judges  and  English  merchants  find  it  hard  to 
understand  why,  in  an  agreement  which  reads  ' '  In  case  of 
difference,  arbitration  in  the  usual  way  by  the  London 
Board  of  Trade,"  our  courts  should  be  astute  to  find  that 
the  intent  of  the  parties  was  to  contract  in  accordance  with 
our  law,  and  that  according  to  our  law,  the  contract  is  in- 
valid.    Such  decisions  encourage  unethical  conduct  upon 

"  Italics  ours. 

"21  Session  Cases  (4tli  Series)   204,  at  p.  212.     Italics  ours. 


272  COMMERCIAL  ARBITRATION 

the  part  of  business  men.  For  it  is  the  clear  intention  of 
the  modern  merchant  that,  whichever  law  is  to  apply, 
there  is  to  be  no  litigation  until  after  an  award  is  made. 
Otherwise  he  stultifies  himself.  The  most  recent  authority 
in  England  ^*  holds  that  when  merchants  insert  a  clause 
that  a  dispute  is  to  be  arbitrated  "in  the  usual  way," 
they  do  not  mean  thereby  "according  to  the  law  (of  arbitra- 
tion) of  the  land,"  but  they  do  mean  "according  to  the 
habitual  custom  of  their  trade." 

A  very  modern  interpretation  is  the  Massachusetts  lead- 
ing case  of  Mittenthal  v.  Mascagni,  decided  in  1903.^^  Mas- 
cagni,  the  great  composer,  while  a  subject  of  Italy,  made 
in  Florence  a  contract  with  a  manager  to  direct  certain 
concerts  and  present  certain  operas,  composed  by  him,  in  a 
fifteen  weeks'  tour  through  the  United  States  and  Canada. 
This  contract  contained  a  provision,  in  substance,  that  the 
contract  should  be  governed  entirely  by  the  laws  of  Italy 
and  that  any  suit  upon  it  should  be  brought  in  the  Courts 
of  Florence,  except  that  Mascagni  might,  if  he  chose,  sue 
in  the  Courts  of  New  York  for  his  compensation.  Fancy 
— all  other  courts  save  those  of  Florence  and  New  York 
completely  "ousted"  of  jurisdiction!  What  would  a 
Massachusetts  court  say  to  that? 

Knowlton,  C.  J.,  says,^^  with  what  would  seem  to  be  a 
very  fine  application  of  common  sense:  "We  can  fancy 
the  parties  to  this  contract  at  the  time  of  making  it  saying 
something  like  this:  'As  the  performance  of  this  contract 
will  not  only  involve  travel  through  one  or  more  foreign 
countries  in  going  to  America  and  returning,  but  will  in- 
volve journeying  long  distances  through  a  great  many  in- 
dependent States,  each  of  which  has  its  own  courts  and 
system  of  laws,  under  some  of  which  a  person  sued  in  a  civil 
action,  when  about  to  leave  the  State  may  be  arrested  and 

"Bright  v.  Gibson,  1916.     Vide  ante,  pp.  223-224. 
"183  Mass.  19. 
"Ibid.,  pp.  23-24. 


THE  ORDINARY  UNDERSTANDING       273 

held  to  bail  or  in  imprisonment,  if  suits  may  be  brought  in 
any  one  of  these  numerous  jurisdictions,  there  is  a  liability 
to  great  trouble  and  expense  on  the  part  of  the  defendant 
in  meeting  the  litigation.  The  contract  contemplates  a 
service  of  fifteen  weeks,  after  which  Maestro  Mascagni  in- 
tends to  return  to  his  permanent  home  in  Florence.  It  will 
be  better  and  more  reasonable  for  both  of  us  to  provide  that 
our  controversies,  if  any  arise,  shall  be  settled  by  the  courts 
of  Florence,  than  to  leave  both  parties  subject  to  suits  in 
forty  or  fifty  different  jurisdictions,  at  great  distances 
from  the  home  of  either. '  ' '  Then  he  asks :  "If,  moved  by 
such  considerations,  the  parties  made  the  agreement  in 
question,  shall  the  court  say  that  they  were  7ion  compotes 
mentis,  and  that  their  agreement  was  so  improvident  and 
unreasonable  that  it  cannot  be  permitted  to  stand  ? ' '  This 
Court  finds  that  "the  tendency  in  modern  times  is  to  per- 
mit greater  freedom  in  contracting  in  matters  of  this  kind 
than  formerly"  and  cites  several  modern  Massachusetts 
decisions.^^ 

It  is  convinced  that  the  "determining  question"  is 
"whether  such  a  contract  as  this  is  so  improvident  and  un- 
reasonable, such  an  abnegation  of  legal  rights,  that  the 
government,  for  the  protection  of  mankind,  will  refuse  to 
recognize  it,  even  when  made  in  a  foreign  country  by  sub- 
jects or  citizens  of  that  country."^*  And  it  recognizes 
clearly  that  such  a  provision  as  this  "is  analogous  to  the 
limitation  of  the  subjects  of  which  the  courts  shall  have  ex- 
clusive jurisdiction,  by  a  provision  for  the  arbitration  of 
incidental  and  subsidiary  questions  out  of  court,  which  is 
approved  in  cases  above  cited.  It  is  also  analogous  to  the 
limitation  by  contract  of  the  time  within  which  suits  may 
be  brought."" 

"Miles  V.  Schmidt,  168  Mass.  339;   Daley  v.  People's  BvMdinffi 
Loan  <f-  Saving  Association,  178  Mass.  13. 
"183  Mass.  19,  at  p.  23. 
'^EUot  National  Bank  v.  Beal,  141  Mass.  S66. 


274  COMMERCIAL  ARBITRATION! 

Accordingly,  in  Massachusetts  such  a  clause  is  held  to  be 
valid.  It  is  true  that  the  Court  calls  attention  to  the  fact 
that  the  contract  is  one  "between  citizens  of  foreign  States 
who,  so  far  as  our  tribunals  are  concerned,  well  might  make 
any  reasonable  arrangement  for  the  settlement  of  their  dis- 
putes." But  the  Court  does  not  rest  its  decision  upon 
the  mere  fact  of  foreign  citizenship,  for  it  says:  *'In  most 
cases,  certainly  in  a  case  like  the  present,  there  is  no  oc- 
casion for  the  protection  of  the  dignity  or  convenience  of 
the  courts."  ^'^  Shall  we  give  to  foreigners  the  right  to 
"make  any  reasonable  arrangement  for  the  settlement  of 
their  disputes"  and  deny  it  to  our  own  citizens?  "There 
is  no  attempt  here  -^  to  deprive  either  party  of  the  right 
of  appeal  to  the  courts  .  ,  ,  but  only  an  attempt  to  nar- 
row the  area  within  which  suits  may  be  brought," 

But  that  is  precisely  what  is  intended  by  the  usual  ar- 
bitration clause,  is  it  not  ?  It  does  not  deprive  either  party 
of  the  right  to  sue;  it  merely  fixes  the  method  for  deter- 
mining the  liability.  No  one  is  deprived  of  his  protection 
by  the  court,  especially  under  submissions  which  have  the 
sanction  of  legislative  authority.  Even  a  Common  Law 
arbitration  can  be  enforced  by  the  courts.  It  was  the 
denial  of  the  right  to  apply  to  the  courts  for  specific  en- 
forcement of  such  an  agreement  which  ousted  the  courts 
of  equity  of  their  inherent  power,  not  the  agreement  it- 
self. If  Baron  Jeffreys'  decision  in  Norton  v.  Mascall^'^ 
or  Lord  Eldon's  in  Waters  v.  Taylor  ^^  were  applied  today, 
such  agreements  would  give  to  the  parties  the  same  rights 
to  enforce  them  in  the  courts  as  are  conferred  upon  them  by 
all  other  reasonable  contracts. 

Lord  Romer  held  in  the  same  year  (1903)  in  England  in 
Austrian  Lloyd  Steamship  Company  v.  Gresham  Life  As- 

^  183  Mass.  19,  at  p.  23.     Italics  ours, 

"^Ihid.,  p.  24, 

*"' Reports  of  Cases  in  Chancery,"  Vol.  11,  p.  304   (1694). 

»» 15  Vesey  Jr.  10. 


THE  ORDINARY  UNDERSTANDING       275 

surance  Society  -*  that  the  agreement  of  the  parties  to  sub- 
mit any  dispute  arising  under  the  contract  to  the  Courts 
at  Budapest  amounted  to  nothing  more  than  the  nomi- 
nating of  "a  particular  individual  as  arbitrator"  and  an 
"agreement  to  submit  any  dispute  under  the  contract  to 
the  arbitration  of  that  person."  And,  accordingly,  it  was 
declared  to  be  valid.^^ 

Over  a  century  before  Lord  Ellenborough  was  called 
upon,  in  the  Courts  of  England,  to  consider  the  same  point. 
He  made  no  distinction  between  subjects  of  England  and 
foreign  subjects.  The  clause  he  had  under  consideration 
was  one  whereby  seamen,  before  taking  their  trip  for  a 
Continental  port,  agreed :  ' '  That  they  would  not  in  foreign 
parts  prosecute  payment  of  any  money  whatever  of  the 
captain,  but  be  satisfied  with  what  he  might  be  pleased  to 
advance  them  abroad  in  deduction  of  their  wages."  The 
report  says  that  ' '  Topping  for  the  plaintiff,  contended  that 
this  was  no  bar  to  the  present  action.  The  parties  hy  their 
private  agreement  could  not  oust  the  jurisdiction  of  our 
courts.  The  plaintiff  might  be  liable  in  his  own  country 
for  suing  here ;  but  the  only  thing  to  be  considered  in  this 
cause  was,  whether  the  wages  were  due."  Lord  Ellen- 
borough  said  that  if  this  had  been  "the  regulation  of  a 
foreign  government,"  he  would  "leave  that  government  to 
enforce  it"  by  penal  or  other  effective  remedy.  "But," 
says  he,  "6?/  ^^^  personal  contract  hetween  the  i^idividuals 
before  the  court,  it  is  expressly  stipulated  that  the  mariners 
shall  not  sue  the  captain  for  wages  in  foreign  parts.  It  is 
impossible  for  me  to  say  that  this  stipulation  is  void." 

»*L.  E.  [1903]  1  K.  B.  249. 

**  The  clause  here  read:  "Pour  iouies  contestations  qui  pourraient 
surgir  du  contrat  d' assurance  toutes  les  parties  inter essees  se  sou- 
meitent  de  convention  expresse  d  la  jurisdiction  des  tribunaux  compe- 
tents  de  Biidapest,"  which  translated  by  the  Anglo-French  jurist, 
Mr.  Thomas  Barclay,  read  as  follows:  "For  all  disputes  which  may 
arise  out  of  the  contract  of  insurance,  all  the  parties  interested  ex- 
pressly agree  to  submit  to  the  jurisdiction  of  the  Courts  of  Budapest 
having  jurisdiction  in  such  matters." 


276  COMMERCIAL  ARBITRATION 

"There  may  be  great  reason,"  said  this  learned  English 
judge  further,  "for  protecting  the  captain  from  suits  in 
foreign  countries,  where  he  may  have  no  funds  to  answer 
the  demands  of  the  mariners;  and  it  may  be  conducive  to 
the  interests  of  commerce  that  the  mariners  should  have 
the  strongest  inducement  to  remain  in  the  ship  till  the  ad- 
venture is  completed.  The  rate  of  wages  might  be  in  part 
determined  by  the  condition  that  they  were  not  demandable 
till  the  ship's  return  home." 

"The  agreement,"  it  is  true,  as  he  says,  "was  made 
abroad;  but  it  is  transitory;  and  we  are  hound  as  far  as 
we  are  able  to  give  it  the  same  construction  and  effect 
which  it  ivould  receive  in  the  country  where  it  was 
made."^^ 

In  another  Massachusetts  case,^'  Judge  Holmes  (now  of 
the  United  States  Supreme  Court)  held  that  an  agreement 
by  stockholders  that  "Any  action  brought  against  this  As- 
sociation by  any  Shareholder  shall  be  brought  ...  in  the 
County  of  Ontario,  State  of  New  York"  was  valid  and  a 
bar  to  suit  in  Massachusetts. 

Judge  Holmes  was  not  terrified  by  any  fear  of  "ouster" 
of  the  Massachusetts  court 's  jurisdiction.  Said  he :  "It  is 
true  that  in  this  case  the  question  is  not  between  counties 
but  between  States,  and  that  our  decision  requires  a  resi- 
dent of  ^Massachusetts  to  go  elsewhere  for  a  remedy  upon 
a  contract  made  here.  Reichard  v.  Manhattan  Ins.  Co.,  31 
Mo.  518,  520,  521.  But  objections  of  this  sort  may  be  made 
to  appear  more  serious  than  they  are.  Courts  are  less  and 
less  disposed  to  interfere  with  parties  making  such  con- 
tracts as  they  choose,  so  long  as  they  interfere  with  no  one's 
welfare  but  their  own.  The  plaintiff  might  have  given  his 
money  to  the  corporation  if  he  had  seen  fit.     We  see  no 

"Johnsoji  V.  Machielscn,  .3  Campb.  44   (1811).     Italics  ours. 
"Daley  v.  People's  Building,  4c.  Assoc.,  178  Mass.  13. 


THE  ORDINARY  UNDERSTANDING       277 

reason  why  he  might  not  give  it  upon  such  partial  return 
as  he  was  content  to  accept."  ^^ 

But  the  Massachusetts  courts  have  not  been  consistent. 
They  still  hold  that  an  arbitration  clause  is  "ousting  the 
courts  of  jurisdiction,"^®  saying  "It  is  well  settled  in  this 
Commonwealth,  that  an  agi'eement  to  refer  to  arbitration 
will  not  be  enforced  in  equity,  and  will  not  be  sustained  as 
a  bar  to  an  action  at  law  or  a  suit  in  equity. ' '  Thus,  hav- 
ing deprived  the  parties  of  all  recourse  to  the  courts  either 
of  law  or  equity  to  enforce  an  agreement  into  which  pre- 
sumably they  entered  while  taking  full  account  of  the  busi- 
ness factor  of  expeditiously  disposing  of  possible  contro- 
versy, the  Court  holds  that  by  so  agreeing  they  have  com- 
pletely ousted  the  courts  of  jurisdiction.^'* 

The  New  York  courts  are  more  consistent.  In  Meacham 
V.  Jamestovm,  F.  &  C.  E.  R.  Co.  (1914),^^  Judge  Cardozo 
finds  that  the  Court  had  already  held  that  "an  agreement 
that  a  foreign  court  shall  have  exclusive  jurisdiction  is  to 
be  condemned"  (citing  Benson  v.  Eastern  B.  &  L.  Assn., 
174  N.  Y.  83),  so  cannot  decide  that  it  is  "saved  by  a 
declaration  that  resort  to  the  foreign  court  shall  be  deemed 
a  condition  precedent  to  the  accrual  of  a  cause  of  action. 
A  rule  would  not  long  survive  if  it  were  subject  to  be 
avoided  by  so  facile  a  device,"  says  he.  He  can  find  no 
difference  in  application  "whether  the  tribunal  is  a  court 
or  a  board  of  arbitrators,"  except  that  in  the  case  of  ju- 
dicial tribunals  of  other  countries  "we  yield  to  regular 

''Ibid.,  pp.  19-20. 

^  See  BrocJcJeJiurst  ^  Potter  Co.  v.  Marseh,  225  Mass.  3;  Beed  v. 
Washington  Fire  ^-  Marine  Ins.  Co.,  138  Mass.  572. 

^''  In  this  connection,  it  is  well  to  bear  in  mind  that  the  Massa- 
chusetts courts  are  still  following  Horton  v.  Sayer,  4  H.  &  N.  643, 
Boper  V.  Lendon,  1  El.  &  El.  S25,' Dawson  v.  Fitzgerald,  L.  E.  1  Ex  D. 
257,  Edwards  v.  Aberayron  Ins.  Soc,  L.  E.  1  Q.  B.  D.  563,  the  obso- 
lete character  of  which  as  guiding  English  precedents  we  have  already 
disclosed  (see  ante,  pp.  185-186,  192-"l95).  See  Eecd  v.  Washington 
Fire  4-  Marine  Ins.  Co.  (1885),  138  Mass.  572,  at  p.  577,  Nute  v. 
HaTnilton  Ins.  Co.,  6  Gray  174,  and  Hall  v.  People's  Ins.  Co.,  6  Gray 
185. 

«211  N.  Y.  346,  at  p.  352. 


278  COMMERCIAL  ARBITRATION 

and  duly  organized  agencies  of  the  state  and  in  the  other 
to  informal  and  in  a  sense  irregular  tribunals. ' '  Thus  the 
New  York  courts  refuse  to  follow  Lord  Ellenborough,  Lord 
Romer,  and  Judge  Knowlton  of  Massachusetts,  and  treat 
contracts  referring  future  controversy  to  other  tribunals 
than  their  own  (whether  "regular  and  duly  organized 
agencies  of  the  state"  or  "informal  and  in  a  sense  irregular 
tribunals")  as  void  and  unenforceable.  In  this  respect 
they  follow  the  fundamental  error  to  its  logical  end,  for 
Judge  Cardozo  makes  it  clear  that  to  reason  "that  resort 
to  the  foreign  court  shall  be  deemed  a  condition  precedent 
to  the  accrual  of  a  cause  of  action ' '  is  but  to  avoid  the  rule 
by  "a  facile  device."  Nevertheless,  as  we  have  seen,  the 
courts  of  New  York  (as  did  the  courts  of  England)  make 
this  very  distinction  in  sustaining  some  arbitration  clauses 
and  invalidating  others.  The  truth  is,  that  until  the  nettle 
is  grasped  by  the  thorns  there  is  no  logical  consistency  in 
the  decisions.^-  Judge  Cardozo,  universally  counted  one 
of  the  ablest  judges  in  New  York,  permits  himself  in  the 
Meacham  case  to  say : 

"The  jurisdiction  of  our  courts  is  established  by  law, 
and  it  is  not  to  be  diminished,  any  more  than  it  is  to  be 
increased,  by  the  convention  of  the  parties." 

Yet  every  day,  one  might  say  every  hour,  parties  by 
their  own  agreements  withdraw  from  the  courts  matters 
which  they  think  can  better  be  disposed  of  by  settlement, 
by  general  release,  by  arbitrament,  and  the  courts  not 
only  assent  to  the  arrangement  but  commend  it.  Most 
assuredly,  if  Judge  Cardozo  had  discovered  that  funda- 
mental precedential  error  had  crept  into  the  law  of  New 
York,  he  would  have  been  the  first  to  correct  and  set  right 
the  common  law  of  his  State,  as  he  has  done  in  other  cases 
in  which  judicial  error  was  committed. ^^ 

'*  See  Engel  v.  Shubert  Theatrical  Co.,  166  App.  Div.  394  and 
brief  therein  of  Walter  H,  Pollak. 

"  See  opinion  in  People  v.  Charles  Schweinler  Press,  214  N.  Y. 
395. 


CHAPTER  XXI 
CONCLUSION 

It  is  no  reflection  upon  the  administration  of  justice  that 
the  desire  of  merchants  to  keep  out  of  courts  should  per- 
sist in  spite  of  the  very  many  improvements  that  have  been 
made  in  judicial  machinery.  We  may  not  wholly  subscribe 
today  to  what  Matthew  Bacon  said:  "It  is  one  of  the 
greatest  Objections  to  our  Laws,  that  the  Way  to  the 
Knowledge  of  them  is  so  dark  and  rugged,  so  full  of 
Windings  and  Turnings,  that  the  most  Knowing  very 
often  find  it  difficult  to  be  able  to  pronounce  with  Cer- 
tainty, concerning  some  Points  they  are  soUicitous 
about. "» 

Yet,  as  Kyd  points  out,  even  after  a  complete  system  of 
law  and  regular  courts  for  the  distribution  of  justice  are 
erected,  by  reason  of  the  necessity  of  giving  certainty  to 
their  decisions  courts  are,  in  fact,  obliged  "to  adapt  pe- 
culiar forms  of  action,  and  modes  of  pleading,  to  the  par- 
ticular nature  of  the  case,  and  to  establish  certain  formali- 
ties in  the  manner  of  bringing  the  parties  before  the  court." 
Consequently,  "The  consideration  of  expence,  that  must 
necessarily  be  incurred  before  a  hearing  can  be  obtained, 
and  a  fear  that  a  technical  mistake  in  some  part  of  the 
proceedings  may  endanger  the  parties  success,  often  'pre- 
vail with  him  {the  merchant) ,  though  satisfied  of  the  jus- 
tice of  his  cause,  to  refer  it  to  the  decision  of  an  indifferent 
person,  before  whom  we  may  explain  every  circumstance, 

*"The  Compleat  Arbitrator  or  the  Law  of  Awards,"  Matthew 
Bacon,  p.  ill. 

279 


280  COMMERCIAL  ARBITRATION 

unthaut  the  apprehension  of  failing  from  ignorance  of 
form."^ 

And  it  is  a  healthy  thing  for  Society  to  dispose  of  con- 
troversy without  friction.  It  was  the  practice  of  Confucius 
to  summon  the  disputants  before  him  and  to  talk  to  them 
of  the  futility  of  quarrels.  "He  importuned  them  to  settle 
amicably  any  controversies  that  arose.  It  was  his  object 
to  have  the  combatants  meet  in  complete  understanding. 
Then  it  was  that  he  set  forth  his  famous  maxim:  'You 
should  not  do  to  others  that  which  you  would  not  have 
others  do  to  you. ' 

"His  principle  of  government  was  'Love  thy  neighbor 
as  thyself. '  It  was  his  object  to  put  down  strife  and  have 
the  people  decide  their  own  disputes."^ 

In  the  Bible  we  read:  "Agree  with  thine  adversary 
quickly,  whiles  thou  art  in  the  way  with  him;  lest  at  any 
time  the  adversary  deliver  thee  to  the  judge,  and  the  judge 
deliver  thee  to  the  officer,  and  thou  be  cast  into  prison."* 

Nowhere  has  this  spirit  of  pacific  adjustment  taken  on 
finer  form  than  in  the  recent  cooperative  action  of  the 
Bar  of  New  York  State  and  the  Chamber  of  Commerce  of 
the  State.  Recognizing  that  this  aim  of  business  men  was 
one  to  be  facilitated,  not  handicapped,  the  Bar  of  New 
York  State  has  now  joined  hands  with  the  business  men  of 
the  State  in  providing  ready  machinery  for  commercial 
arbitration.  Today  there  is  available  for  every  kind  of 
controversy  an  "Official  List  of  Arbitrators"  made  up  of 
lawyers,  or  of  business  men,  awaiting  one's  choice.  The 
"Rules  for  the  Prevention  of  Unnecessary  Litigation"  (see 
Appendix  A)  were  designed  to  aid  merchants  with  wise 
counsel  and  advice  before  controversy  arises,  and,  when  it 

•"A  Treatise  on  the  Law  of  Awards" — Stewart  Kyd,  pp.  2,  3. 
Italics  ours. 
•Scott:   "The  Evolution  of  Law,"  pp.  99-100. 
*Matt  v.,  25. 


CONCLUSION  281 

does  arise,  to  put  at  their  command  simple  machinery  with 
which  to  dispose  of  it  quickly. 

Why  should  such  a  movement  be  hampered  by  the  con- 
tinuance of  a  rule  unsound  in  public  policy,  bad  m  legal 
theory,  obsolete  historically  and  unsupported  by  sound  le^al 
precedent  ?  Only  lack  of  true  information  has  kept  it  alive 
so  long.  But  ''Ignorantia  Legis  Neminem  ExciLsat." 
(Ignorance  of  the  Law  excuses  no  man  )  This  includes 
the  Lawyer  and  the  Judge,  does  it  not?  And  if  repudia- 
tion of  one 's  promise  to  arbitrate  is,  as  Lord  Eldon  put  it, 
immoral,  why  continue  to  lend  legal  sanction  to  it? 


APPENDICES 

APPENDIX  A 

REPORT  OF  THE  JOINT  COMMITTEE  OF  THE  CHAMBER  OP 

COMMERCE  OF  THE  STATE  OF  NEW  YORK  AND  OF 

THE    NEW   YORK   STATE    BAR   ASSOCIATION. 

Approved  by  the  Chamber  of  Commerce,  November  2, 1916. 

Rules  fob  the  Prevention  of  Unnecessary  Litigation 

Object  of  the  'Rules — It  would  be  impracticable  for  the  Cham- 
ber of  Commerce  of  the  State  of  New  York  and  the  New  York 
State  Bar  Association  to  attempt  to  lay  down  rules  of  law  for 
the  guidance  of  laymen.  That  would  be  an  attempt  to  write 
law  books  and  to  make  every  man  his  own  lawyer.  Such  a 
course  would  be  futile.  It  would  promote,  rather  than  prevent, 
unnecessary  litigation. 

The  attempt  here  made  is  simply  to  put  in  concrete  form  a 
few  common  sense  rules  of  business  which  experience  has  proved 
to  be  valuable  in  the  prevention  of  unnecessaiy  litigation.  As 
litigation  and  its  prevention  are  peculiarly  within  the  province  of 
the  legal  profession,  these  rules  necessarily  relate,  in  large  meas- 
ure, to  the  advice  of  counsel  and  to  the  point  at  which  it  is  to  the 
interest  of  the  business  man  to  turn  to  his  lawyer  for  guidance. 

These  rules  are  constructed  on  the  theory  that  prevention  is 
preferable  to  cure.  They  contain  nothing  that  is  new  and  much 
that  is  necessarily  general  and  commonplace.  If  they  did  not 
represent  a  common  experience,  they  would  be  useless.  Therefore, 
in  the  preparation  of  these  rules,  an  effort  has  been  made  to 
present  recognized  business  principles  in  the  simplest  fonn  and 
even  to  formulate  what  may  sometimes  seem  to  be  self-evident 
truths.  Even  if  the  truths  are  trite,  the  fact  that  they  are  formu- 
lated may  serve  as  a  reminder  at  a  critical  moment. 

283 


284  APPENDICES 

Unnecessary  Litigation  Defined — Litigation  may  be  said  to  be 
tunnecessary  if  it  can  be  prevented  by  the  exercise  of  reasonable 
care.  There  are  three  points  at  which  reasonable  care  is  specially 
effective.  Care  at  the  source  is,  of  course,  most  effective.  After 
the  facts  become  fixed  and  before  suit,  it  may  or  may  not  prevent 
litigation.  After  suit,  it  may  reduce  the  litigation.  These  rules 
are  accordingly  divided  into  three  parts: 

L  Prevention  of  Litigation  at  the  Source. 
n.  Prevention  of  Litigation  after  the  Facts  become  fixed  and 

before  Suit. 
III.  Prevention  of  Litigation  after  Suit. 


PAET  n 

Prevention  op  Litigation  aptee  the  Facts  Become  Fixed  and 
Before  Suit 

After  the  facts  upon  which  a  dispute  can  be  based  have  become 
fixed,  either  before  or  after  a  dispute  has  arisen,  it  is  possible 
to  do  much  to  prevent  litigation.  What  can  best  be  done  in  each 
case  and  whether  with  or  without  legal  ad\ace,  necessarily  de- 
pends upon  the  facts  and  the  parties  to  the  prospective  contro- 
versy. Differences  may  be  minimized,  adjusted  or  arbitrated. 
If  not  so  disposed  of,  litigation  will  usually  ensue. 

Rule  1.  In  the  matter  of  good  faith  give  your  adversary  the 
benefit  of  the  doubt. 

Rule  2.  Remember  that  pugnacity,  vindictiveness,  ill  temper, 
impatience,  carelessness,  short-sightedness,  arrogance,  eagerness 
to  take  undue  advantage  and  insistence  on  unethical  principles 
are  all  provocative  of  litigation.  Even  if  these  instincts  are  in- 
herent in  human  nature  they  may  be  controlled  by  an  impartial 
consideration  of  the  facts  and  a  proper  exercise  of  the  reasoning 
powers.  Before  rushing  into  litigation  wise  legal  advice  of  the 
right  sort  is  all  important. 

Rule  3,  Endeavor  to  look  at  both  sides  of  a  situation  in  a  calm 
and  impartial  manner.     Eliminate  all  personal  animosity. 

Rule  4.  Discuss  your  differences  fairly,  frankly,  patiently, 
without  prejudice  and  with  due  regard  to  the  sensibilities  of  the 


APPENDICES  285 

other  parties  in  interest,  or  employ  a  lawyer  who  will  do  so. 

Rule  5.  In  such  di*ussions  with  adverse  parties  avoid  making 
positive  assertions,  even  if  true,  which  may  be  offensive,  but 
rather  state  the  same  facts  in  a  diplomatic  manner  not  calculated 
unnecessarily  to  arouse  antagonism. 

EuLE  6.  Throw  all  light  possible  upon  the  questions  involved  in 
the  controversy  in  order  that  nothing  shall  be  concealed  which,  if 
known,  might  harmonize  divergent  views. 

EuLB  7.  Display  a  spirit  of  conciliation  and  be  prepared  to 
make  some  concessions,  if  necessary,  to  avoid  a  breach. 

Rule  8.  Remember  that  "a  lean  settlement  is  better  than  a  fat 
law  suit." 

EULK  9.  Wben  negotiations  fail  to  settle  a  dispute  submit  the 
questions  to  arbitration  and  abide  by  the  decision  of  the  arbitrators. 

Minimizing  Differences — It  sometimes  happens  that,  notwith- 
standing the  die  is  cast  that  foreshadows  a  dispute,  it  is  possible 
to  pursue  some  course  of  action  which  will  have  the  effect  of 
reducing  differences  or  damages  to  a  minimum.  Such  a  course 
must  generally  be  promptly  undertaken  and  may  or  may  not 
require  legal  advice,  depending  upon  the  parties  and  the  ques- 
tions involved. 

Adjiistment  of  Differences — Differences  may  be  adjusted  by 
the  parties  themselves  or  with  the  aid  of  a  mutual  friend  or  their 
legal  advisers.  Which  method  is  better  depends  upon  the  parties 
and  the  questions  concerned.  When  questions  of  law  are  in- 
volved, the  legal  opinion  of  a  lawyer  acceptable  to  both  parties 
is  often  sufficient. 

Submission  of  Controversy  upon  Agreed  Statement  of  Facts' — 
Persons  of  full  age  may  submit  to  the  court  upon  an  agreed  state- 
ment of  facts  any  question  of  difference  which  might  be  the 
subject  of  an  actioru  This  should  never  be  done  without  advice 
of  comisel. 

The  usual  difficulty  with  this  procedure  is  that  the  parties  will 
not  agree  upon  the  facts  thus  rendering  a  legal  or  equitable  action 
necessary. 

Where  the  parties  are  able  to  agree,  however,  this  method  of 
procedure  is  speedy,  amicable  and  effective,  resulting  in  a  formal 
judgment  of  the  court. 


286  APPENDICES 

Arbitration — Where  differences  cannot  be  adjusted  between  the 
parties  or  their  attorneys  and  the  intervention  of  a  third  party 
becomes  necessary,  there  are  several  foi-ms  which  arbitration  may 
take.  The  arbitration  may  be  (1)  informal,  (2)  under  the  Code, 
(3)  under  the  auspices  of  a  commercial  body,  or  (4)  under  the 
auspices  of  a  bar  association. 

The  experience  of  many  business  men  and  lawyers  testifies  to 
the  advantage  of  these  methods  of  adjusting  differences  wherever 
possible.    They  are  inexpensive,  speedy  and  peaceful. 

Parties  who  may  arbitrate — Under  the  law  of  this  state  a  corpo- 
ration or  any  person  of  full  age  and  sound  mind  may  enter  into 
arbitration. 

Disputes  which  may  be  arbitrated — Under  the  law  of  this  state 
any  existing  controversy  may  be  submitted  to  arbitration  except 
a  claim  to  an  estate  in  real  property  in  fee  or  for  life. 

Where  the  sole  arbitrator  is  a  lawyer,  or  where  the  submission 
provides  that  a  lawyer  on  the  board  of  arbitrators  shall  be  sole 
judge  of  the  law,  there  is  no  reason  why  substantially  any  ques- 
tion of  law  or  fact  invohdng  property  rights  should  not  be  arbi- 
trated, provided  the  parties  interested  are  of  full  age  and  sound 
mind.  In  arbitrations  involving  technical  questions,  whether  in. 
law  or  special  lines  of  business,  experience  has  shown  the  ad- 
vantage of  selecting  as  arbitrators  persons  in  that  particular 
line  of  business  or  otherwise  familiar  with  the  trade  customs  or 
technicalities  involved. 

The  following  are  peculiarly  appropriate  subjects  for  Arbitra- 
tion :  disputes  concerning  contracts,  wills,  mechanics'  liens,  insur- 
ance policies,  sale  and  delivei-y  of  goods,  partnerships,  commissions, 
value  of  services,  and  particularly  disputes  arising  out  of  business 
transactions  in  foreign  countries,  etc. 

Informal  Arbitration — Informal  arbitration  is  simply  the  sub- 
mission of  a  controversy  to  a  third  party  without  formality  with 
an  understanding  to  abide  by  the  decision.  Such  third  party  may 
be  a  business  man  or  a  lawyer  whose  legal  opinion  is  acceptable 
to  both.  This  method  is  often  very  effective  when  the  controversy 
is  one  that  can  be  settled  out  of  court. 

Arbitration  under  the  Code — The  Code  provides  a  complete 
system  for  the  arbitration  of  differences  before  one  or  more  arbi- 
trators to  be  selected  by  the  parties.     A  written  submission  to 


APPENDICES  287 

arbitration  is  required  and,  at  the  option  of  the  parties,  it  may 
provide  for  a  judgment  of  the  court  to  be  entered  on  the  awai'd. 

Arbitration  under  the  Auspices  of  Commercial  Bodies — The 
New  York  Chamber  of  Commerce  and  many  other  commercial 
bodies  have  pro\dded  systems  of  arbitration  not  only  for  the  use 
of  their  own  members  but  also  for  non-members  whether  citizens 
of  this  or  any  foreign  country-.  They  maintain  committees  of  ar- 
bitration to  supenise  such  matters. 

Arbitration  under  the  Auspices  of  the  New  York  State  Bar 
Association — Following  the  example  of  commercial  bodies,  the 
New  York  State  Bar  Association  has  established  under  its  auspices 
a  system  of  arbitration  which  it  deems  practicable  for  lawyers 
to  recommend  to  clients  wishing  to  settle  their  disputes  by  arbitra- 
tion. With  one  or  more  lawyers  sitting  in  each  case,  arbitrators 
are  enabled  to  pass  upon  questions  of  law  as  well  as  questions 
of  fact. 

PART  III 

Prevention  op  Litigation  after  Suit 

After  a  suit  has  been  commenced,  the  parties  should  leave  its 
management  and  all  negotiations  relating  to  the  conduct  or  set- 
tlement thereof  in  the  hands  of  their  respective  counsel. 

The  Chamber  of  Commerce  of  the  State  of  New  York  and  the 
New  York  State  Bar  Association,  with  a  view  to  the  prevention  of 
unnecessary  litigation  after  suit,  urge  upon  members  of  the  Bar 
that  they  make  effort,  even  after  litigation  has  begun,  to  bring 
about  an  amicable  adjustment  of  differences;  or,  where  this  is 
impossible,  to  reduce  disputed  facts  and  disputed  questions  of 
law  to  a  minimum.  The  Chamber  and  the  Bar  Association  rec- 
ommend that,  in  arranging  for  conferences,  members  of  the  Bar 
call  attention  to  this  recommendation  as  the  opinion  of  public 
bodies  submitted  for  the  guidance  of  parties  involved  in  litigation. 

It  would  seem  to  be  within  the  power  of  counsel  in  most  cases  to 
bring  the  parties  together,  if  not  upon  terms  of  settlement,  at  least 
upon  facts  which  should  not  unnecessarily  occupy  the  time  of  the 
Court.  To  that  end  parties  and  counsel  are  urged  to  encourage 
agreements  and  stipulations  concerning  the  facts  wherever  possible. 


288  APPENDICES 

In  this  eormeotion  a  perusal  of  the  rules  under  Part  II  is  com- 
mended to  all  parties  in  interest. 


APPENDIX  B 

RULES  AND  REGULATIONS  OF  THE  CHAMBER  OF  COM- 
MERCE OF  THE  STATE  OF  NEW  YORK 


All  Submissions  shall  be  in  proper  form  and  a  copy  filed  with 
the  Clerk,  duly  acknowledged  before  a  notary  or  other  authorized 
official  as  required  by  law,  together  vnth  sufficient  evidence  of  proof 
of  authority  in  the  ease  of  an  agency,  partnership  or  corporation, 

(a.)  If  signed  by  an  agent,  duly  authenticated  copy  of  his 
power  of  attorney; 

(b.)  If  signed  by  one  or  more  partners,  written  consent  from 
co-partners  not  signing  Submission; 

(c.)  If  signed  in  behalf  of  a  corporation,  duly  certified  copy 
of  resolution  authorizing  Submission. 

n 

The  proceedings  shall  not  be  public  unless  requested  by  the 
parties.  Members  of  the  Committee  on  Arbitration  may  be  present 
at  any  of  the  hearings.  The  records  shall  be  open  at  all  times  to 
members  of  the  Chamber  of  Commerce  and  others  upon  the  written 
order  of  the  Committee  on  Arbitration. 

ni 

The  hearing  of  cases  shall  commence  as  soon  as  practicable  after 
Submission,  and  shall  be  pressed  to  speedy  termination. 

IV 

All  irrelevant  or  unimportant  matters  shall  be  excluded. 

V 

The  Arbitrators  shall  construe  these  rules  and  the  submission 
to  them  as  being  designed  to  .secure  reason  and  equity  in  matters  of 


APPENDICES  289 

trade  and  commerce,  with  the  least  posMble  expendituie  of  time, 
energy  and  money  and  in  such  manner  as  to  avoid  all  unnecessary 
irritation. 

VI 

If  three  Arbitrators  are  chosen,  the  one  chosen  from  the  "Ligt  of 
OflBcial  Arbitrators"  shall  act  as  Chairman. 

vn 

Each  party  to  the  Arbitration  shall  be  entitled  to  a  copy  of  the 
award. 

VIII 

The  Chamber  of  Commerce  will  provide  the  parties  who  submit 
to  Arbitration  under  its  rules,  with  adequate  room  and  all  neces- 
sary forms  and  papers  free  of  charge,  and  through  its  Committee 
on  Arbitration,  will  endeavor  to  do  or  cause  to  be  done  all  such 
acts  as  it  properly  may  do  for  the  purpose  of  assisting  the  par- 
ties and  the  Arbitrators  in  the  course  of  an  Arbitration. 

IX 

Each  party  shall  furnish  his  own  witnesses,  paying  the  fees 
thereof. 

X 

A  competent  stenographer  shall  be  employed,  and  the  expense 
for  this  service  is  to  be  charged  against  the  parties  to  the  Submis- 
sion as  the  Arbitrators  may  decide. 

XI 

In  case  of  any  misunderstanding  or  any  question  concerning  the 
interpretation  of  these  Rules  and  Regulations,  the  decision  of  the 
Committee  on  Arbitration  of  the  Chamber  of  Conamerce  shall  be 
accepted  by  the  parties  as  conclusive. 

xn 

Wherever  the  word  "Party"  or  "Parties"  is  used  in  these  rules 
it  shall  refer  to  the  parties  to  the  Submission,  and  wherever  the 
word  "Arbitrator"  or  "Arbitrators"  is  used  it  shall  refer  to  the 


290  APPENDICES 

Arbitrator  or  Arbitrators  as  the  case  may  be,  whether  there  are 
one  or  more.  Whenever  the  word  "Committee"  is  used,  it  shall 
refer  to  the  Committee  on  Arbitration  of  the  Chamber  of  Com- 
merce. "Whenever  the  word  "Clerk"  is  used,  it  refers  to  the  Clerk 
of  the  Committee  on  Arbitration. 

FEES 

All  fees  of  Arbitrators,  expense  for  stenographers  and  other 
minor  expenses  shall  be  awarded  as  the  Arbitrators  may  decide. 

DEPOSIT 

The  parties  to  the  Submission  shall  each  deposit  with  the  Clerk 
at  the  time  of  filing  the  Submission,  the  sum  of  $60.00 — or  at  the 
discretion  of  the  Committee,  a  larger  amount — ^which  shall  be 
disbursed  by  him  for  their  account  in  payment  of  Arbitrators' 
and  stenogi'aphers'  fees  and  minor  expenses : 

(a.)     Arbitrators'  fees:  $10.00  per  day  or  part  thereof; 
(6.)     Stenographers'  fees:  the  usual  remuneration; 

(Note. — The  fees  for  Stenographer  are  based  on  the 
following : 

25  cents  per  folio  of  10  lines,  and  5  cents  per  folio  each 

for  the  second  and  third  copies.) 

If  the  Deposit  appears  insufficient  to  the  Clerk,  or  becomes  ex- 
hausted, he  shall  call  upon  the  parties  equally  for  such  further 
sums  as  may  be  required :  any  balance  to  be  refunded  as  the  Arbi- 
trators may  decide. 

THE  CLERK 

The  duties  of  the  Clerk  of  the  Committee  on  Arbitration  shall 
be  as  follows: 

He  shall  receive  and  file  all  Submissions,  all  copies  of  awards, 
give  notice  of  all  hearings,  keep  a  docket  of  all  eases,  and  such 
other  books  and  memoranda  as  the  Committee  shall  from  time 
to  time  direct. 

He  shall  render  all  necessary  assistance  to  the  Arbitrators,  at- 
tend to  their  clerical  work;  receive  and  disburse  all  fees  and  costs 


APPENDICES  291 

and  keep  careful  and  accurate  account  thereof,  under  the  super- 
vision of  the  Committee  on  Arbitration. 

If  the  clerk  of  the  Committee  on  Arbitration  is  unable  to  attend, 
the  Assistant  Secretary  of  the  Chamber  of  Commerce  shall  take 
his  place. 

AMENDMENTS 

The  Committee  reserves  full  power  to  amend,  add  to  or  omit  any 
of  these  rules  from  time  to  time,  as  may  be  found  expedient. 


POEMS  OF  SUBMISSION 


To  Be  Used  in  Submitting  for  Arbitration  Cases  op 
Difference 

Form  A 

The  Committee  on  Arbitration  of  the  Chamber  of  Commerce 
OF  THE  State  of  New  York 


and 


Submission. 


A  controversy,  dispute  or  matter  of  difference  between  the 
undersigned  having  ainsen  and  relating  to  a  subject  matter  the 
nature  of  which,  briefly  stated,  is  as  follows: 

We  do  hereby  voluntarily  submit  the  same  and  all  matters  con- 
cerning the  same  to  aa  Arbitrator,  selected 
by  us  from  the  "List  of  Official  Arbitrators/'  compiled  and 
established  by  the  Committee  on  Arbitration  of  the  Chamber  of 
Commerce  of  the  State  of  New  York,  for  hearing  and  decision 
pursuant  to  the,^  Bj'-laws  of  the  Chamber  of  Commerce  of  the 
State  of  New  York,  and  the  Rules  and  Regulations  adopted  by 


299  APPENDICES 

the  Cominittee  on  Arbitration  of  the  Chamber  of  Commerce,  aad 
pursuant  to  Chapter  17,  Title  VIII.  of  the  Code  of  Civil  Pro- 
cedure of  the  State  of  New  York,  and  we  agree  to  stand  to,  abide 
by  and  perform  the  decision,  award,  order,  orders  and  judgment 
that  may  therein  and  thereupon  be  made  under,  pursuant  and 
by  virtue  of,  this  submission. 

And  we  do  further  agree  that  a  judgment  of  the  Supreme  Court 
of  the  State  of  New  York,  may  be  entered  in  any  County  in  the 
State  of  New  York  thereon. 

We  do  also  in  all  respects  waive  any  right  to  withdraw  from  or 
revoke  this  submission  after  the  arbitrator  or  arbitrators  accept 
their  appointment  hereunder,  hereby  expressly  and  specifically 
waiving  the  provisions  of  Section  2383  of  the  Code  of  Civil 
Procedure. 

Dated,  New  York. 

(Usual  forms  of  corporate  and  individual  acknowledgmenta 
before  notaries,  etc) 

Form  B 

The  Committee  on  Arbitration  of  the  Chambhb  of  Commbscb 

OF  THE  State  of  New  York 
1 


and 


■  Submission, 


A  controversy,  dispute  or  matter  of  difference  between  the  un- 
dersigned having  arisen  and  relating  to  a  subject  matter  the 
nature  of  which,  briefly  stated,  is  as  follows : 

We  do  hereby  voluntarily  submit  the  same  and  all  matters  con- 
cerning the  same  to  and 
who  shall  select  a  third  arbitrator  from  the  "List  of  Official 
Arbitrators,"  compiled  and  established  by  the  Committee  on 
Arbitration  of  the  Chamber  of  Commerce  of  the  State  of  New 
York,  for  hearing  and  decision  pursuant  to  the  By-laws  of  the 
Chamber  of  Commerce  of  the  State  of  New  York,  and  the  Rules 


APPENDICES  293 

and  Regulations  adopted  by  the  Committee  on  Arbitration  of  the 
Chamber  of  Commerce,  and  pursuant  to  Chapter  17,  Title  VIII. 
of  the  Code  of  Civil  Procedure  of  the  State  of  Now  York,  and 
■we  agree  to  stand  to,  abide  by  and  perform  the  decision,  award, 
order,  orders  and  judgment  that  may  therein  and  thereupon  be 
made  under,  pursuant  and  by  virtue  of,  this  submission. 

And  we  do  further  agree  that  a  judgment  of  the  Supreme  Court 
of  the  State  of  New  York  may  be  entered  in  any  County  in  the 
State  of  New  York  thereon. 

We  do  also  in  all  respects  waive  any  right  to  withdraw  from  or 
revoke  this  submission  after  the  arbitrator  or  arbitrators  accept 
their  appointment  hereunder,  hereby  expressly  and  specifically 
waiving  the  provisions  of  Section  2383  of  the  Code  of  Civil 
Procedure. 

Dated,  New  York. 

FOBM  C 

The  Committeb  on  Arbitration  of  the  Chamber  op  Commerce 
OF  THE  State  op  New  York 


<snd 


'  Svbmission, 


A  controversy,  dispute  or  matter  of  difference  between  the 
undersigned  having  arisen  and  relating  to  a  subject  matter  the 
nature  of  which,  briefly  stated,  is  as  follows: 

We  do  hereby  voluntarily  submit  the  same  and  all  matters  con- 
cerning the  same  to 

as  Committee  on  Arbitration  of  the  Chamber  of  Commerce,  or  a 
quorum  thereof,  as  Arbitrators  selected  by  us  for  hearing  and  de- 
cision pursuant  to  the  By-laws  of  the  Chamber  of  Commerce  of 
the  State  of  New  York,  and  the  Rules  and  Regulations  adopted 


294.  APPENDICES 

by  the  Committee  on  Arbitration  of  the  Chamber  of  Commerce, 
and  pursuant  to  Chapter  17,  Title  VIII.  of  the  Code  of  Civil  Pro- 
cedure of  the  State  of  New  York,  and  we  agree  to  stand  to,  abide 
by  and  perform  the  decision,  award,  order,  orders  and  judgment 
that  may  therein  and  thereupon  be  made  mider,  pursuant  and  by 
virtue  of,  this  submission. 

And  we  do  further  agree  that  a  judgment  of  the  Supreme 
Court  of  the  State  of  New  York  may  be  entered  in  any  County 
in  the  State  of  New  York  thereon. 

We  do  also  in  all  respects  waive  any  right  to  withdraw  from 
or  revoke  this  submission  after  the  arbitrator  or  arbitrators 
accept  their  appointment  hereunder,  hereby  expressly  and  spe- 
cifically waiving  the  provisions  of  Section  2383  of  the  Code  of 
Civil  Procedure. 

Bated,  New  York. 


APPENDIX  C 
ILLINOIS  LAW  OF  AEBITEATION 

Approved  June  11,  1917. 

Section  1.  Be  it  enacted  by  the  People  of  the  State  of  Illinois, 
represented  in  the  General  Assembly:  That  all  persons  having 
requisite  legal  capacity  may  by  an  instrument  in  writing  to  be 
signed  by  them  submit  to  one  or  more  arbitrators  to  be  named  in 
the  manner  indicated  by  such  writing,  any  controversy  existing 
between  them,  and  may,  in  such  submission  agree  that  a  judg- 
ment of  any  court  competent  to  have  jurisdiction  of  the  subject 
matter  of  such  instrument,  shall  be  rendered  upon  the  award 
made  pursuant  to  such  submission. 

Sec.  2.  The  parties  to  such  submission  may  by  such  submis- 
sion designate  the  number  of  such  arbitrators,  which  number 
may  be  one  or  more  as  the  parties  shall  agree;  the  manner  in 
which  they  may  be  appointed  in  the  first  instance  and  vacancies 
caused  by  the  refusal,  incapacity  or  death  of  an  appointee  filled; 
the  time  and  place  of  the  hearing  and  the  rules  for  the  hearing 


APPENDICES  295 

of  such  controversy,  not  in  conflict  with  the  provisions  of  this 
Act;  the  pai-ties  to  such  submission  may  include  by  reference  in 
said  wi'itten  submission  the  published  rules  of  any  organization 
or  association  which  rules  shall  thereby  become  a  part  of  the 
contract  of  submission. 

Sec.  3.  A  submission  to  arbitration  shall,  imless  a  contrary 
intention  is  expressed  therein,  be  irrevocable. 

Sec.  4.  Said  arbitrators  or  any  of  them  shall  have  the  power- 
to  administer  oaths,  subpoena  and  examine  witnesses,  to  issue 
subpoenas  duces  tecum  requiring  the  production  of  such  books, 
papers,  records  and  dociunents  as  may  be  evidence  of  any  matter 
imder  inquiry  and  to  examine  and  inspect  the  same;  service  of 
such  subpoena  shall  be  made  by  any  sheriff  or  constable  or  other 
person;  the  fees  of  witnesses  for  attendance  and  travel  shall  be 
the  same  as  the  fees  of  witnesses  before  the  circuit  courts  of  this 
State;  any  court  of  this  State,  having  jurisdiction  of  the  sub- 
ject matter  of  the  submission  or  any  judge  thereof  upon  the 
application  of  such  arbitratoi-s  or  any  of  them,  either  in  term 
time  or  vacation  may  compel  attendance  of  witnesses,  the  pro- 
duction of  books  and  papers  and  giving  of  testimony  before  said 
arbitrators  by  attachment  for  contempt  or  otherwise  in  the 
same  manner  as  the  production  of  evidence  may  be  compelled 
before  said  court. 

Sec.  5.  The  said  arbitrators  may  authorize  the  taking  of  depo- 
sitions without  a  commission  in  the  same  manner  as  may  be 
provided  by  law  for  the  taking  of  depositions  in  suits  pending 
in  courts  of  record  of  this  State. 

Sec,  6.  The  arbitrators  may,  of  their  own  motion  and  shall  by 
request  of  a  party 

(a)  at  any  stage  of  the  proceedings  submit  any  question  of  law 
arising  in  the  course  of  the  reference  for  the  opinion  of  the  court 
stating  the  facts  upon  which  the  question  arises  and  such  opinion 
when  given  shall  bind  the  arbitrators  in  the  making  of  their  award. 

(b)  state  their  final  award  as  to  the  whole  or  a  part  of  the 
reference  in  the  form  of  a  conclusion  of  fact  for  the  opinion 
of  the  court  on  the  questions  of  law  arising  and  such  opinion 
shall  finally  conclude  the  proceeding,  except  as  by  this  Act  other- 
wise provided. 

Sec.  7.  The  award  of  the  arbitrators,  or  a  majority  of  them, 


296  APPENDICES 

shall  be  drawn  np  in  writing  and  signed  by  the  arbitrators  or  a 
majority  of  them;  the  award  shall  definitely  deal  with  all  mat- 
ters of  difference  in  the  submission  requiring  settlement,  but  the 
arbitrators  may,  in  their  discretion,  make  a  partial  award  or 
awards,  which  shall  be  enforceable  in  the  same  manner  as  the 
final  award ;  upon  the  making  of  such  award,  the  arbitrators  shall 
deliver  a  true  copy  thereof  to  each  of  the  parties  thereto  without 
delay. 

Sec.  S.  If  either  of  the  parties  neglect  to  comply  with  any 
partial  or  final  award,  made  by  the  arbitrators,  the  other  party 
may,  at  any  time  within  one  year  from  the  lime  of  such  failure, 
file  such  award,  together  with  the  submission  in  court. 

Sec.  9.  The  party  filing  such  award  may,  by  giving  ten  days' 
notice  of  his  intention  to  the  opposite  party,  and  if  no  legal  ex- 
ceptions are  taken  to  such  award,  have  judgment  thereon,  as  on 
the  verdict  of  a  jury;  upon  any  legal  exceptions  taken,  the  find- 
ings of  fact  by  the  arbitrators  shall  be  conclusive;  successive 
judgments  in  the  same  case  may  be  entered  on  successive  awards 
of  the  arbitrators  on  the  subject  matter  of  the  submission  together 
with  the  costs  of  arbitration  and  the  court,  and  execution  may  issue 
as  in  other  cases. 

Sec.  10.  When  the  award  requires  the  performance  of  any  act 
other  than  the  payment  of  money,  the  court  rendering  such 
judgment  shall  enforce  the  same  by  rule,  and  the  party  refusing 
or  neglecting  to  comply  with  such  rale  may  be  proceeded  against 
by  attachment  or  otherwise  as  for  a  contempt. 

Sec.  11.  If  any  legal  defects  shall  appear  in  the  award  or  other 
proceedings,  or  if  it  shall  appear  that  the  award  is  not  sustain- 
able tmder  the  opinions  of  the  court  upon  questions  of  law  under 
section  6  of  this  Act,  the  court  may  set  aside  such  award,  or  remit 
the  matters  contained  in  the  said  award  to  the  reconsideration 
of  the  said  arbitrators ;  or,  if  it  shall  appear,  on  oath  or  affirma- 
tion that  said  award  was  obtained  by  fraud,  corruption  or  other 
tmdue  means,  or  that  such  arbitrators  misbehaved,  said  court  may 
set  aside  such  award. 

Sec.  12.  If  there  be  any  evident  miscalculation  or  misdescrip- 
tion, or  if  the  arbitrators  shall  appear  to  have  awarded  upon 
matters  not  submitted  to  them,  not  affecting  the  merits  of  the 
decision  upon  the  matters  submitted,  or  where  the  award  shall  b« 


APPENDICES  297 

imperfect  in  some  matteis  of  form,  not  affecting  the  merits  of  the 
controversy,  and  where  such  errors  and  defects,  if  in  a  verdict, 
conid  have  been  lawfidJy  amended  or  disregarded  by  the  court, 
any  party  aggrieved  may  move  the  court  to  modify  or  correet 
such  award. 

Sec.  13.  Applications  to  set  aside,  modify  or  amend  or  remit 
such  award,  as  provided  in  the  sections  11  and  12  of  this  Act,  must 
be  made  before  the  entry  of  final  judgment  on  such  award: 
Provided,  nothing  herein  contained  shall  be  so  construed  as  to  de- 
prive courts  of  chancery  of  their  jurisdiction,  as  in  other  cases. 

Sbc.  14.  Writs  of  error  and  appeals  may  be  iskea  from  any 
decision  of  the  court  upon  questions  of  law  under  section  6  of  this 
Act.  or  matters  arising  in  the  course  of  the  proceedings,  by  the 
party  feeling  himself  aggrieved,  as  in  other  eases ;  and  if  the  case 
shall  be  upon  such  writ  of  error  or  appeal  remanded,  such  further 
proceedings  shall  be  had  as  the  nature  of  the  case  may  require. 

Sec.  15.  The  parties  may,  in  the  submission,  agree  upon  the 
amount  of  compensation  to  be  paid  to  the  arbitrators  and  the 
terms  of  the  payment  of  the  same;  unless  so  agreed,  each  arbi- 
trator shall  be  allowed,  for  every  day's  attendance  to  the  business 
of  his  appointment  $3.00,  to  be  paid  in  the  first  instance  by  the 
party  in  whose  favor  the  award  shall  be  made,  but  to  be  recov- 
ered of  the  other  party  with  the  other  costs  of  suit,  if  the  award 
or  final  decision  shall  entitle  the  prevailing  party  to  recover  costs. 
Sheriffs,  constables,  the  bailiff  of  the  municipal  court  of  Chicago, 
clerks  and  justices  of  the  peace  shall  be  entitled  to  the  same  fees 
for  services  performed  in  relation  to  any  arbitration,  as  shall  be 
allowed  by  law  for  the  like  services  in  their  respective  c-ourts. 

Seo.  16.  Arbitrators  may  be  compelled,  by  order  of  the  court, 
to  proceed  to  a  hearing  of  the  submission  and  to  make  report 
without  unnecessary  delay. 

Sbc.  17.  In  this  Act  unless  the  context  or  subject  matter  other- 
wise requires. 

"Court,"  means  the  court  named  in  the  submission,  and  if  no 
court  be  named,  any  court  having  jurisdiction  of  the  subject  mat- 
ter, to  which  application  is  made  or  proceedings  had  on  a 
submission. 

•Submission"  means  a  written  agreement  to  submit  differences 


298  APPENDICES 

to  arbitration,  whether  such  differences  be  in  whole  or  in  part  in 
suit  or  not  in  suit. 

Seo.  18.  [Repeal.]  An  Act  to  revise  the  law  in  relation  to  arbi- 
trations and  awards,  approved  April  29,  1873,  in  force  July  1, 
1873,  except  as  herein  reenacted,  is  hereby  repealed,  but  this 
section  shall  not  be  construed  so  as  to  affect  any  right,  actions  or 
causes  of  action  that  may  have  accrued  or  be  pending  when  :this 
Act  shall  take  effect. 

Approved  June  11,  1917. 


APPENDIX  D 

FOEM  OF  ARBITRATION  AGREEMENT   ADOPTED  BY  THE 

PUBLIC  SERVICE  COMMISSION  FOR  THE  FIRST  DISTRICT 

OF  THE  STATE  OF  NEW  YORK  WITH  THE  INTERBOR- 

OUGH  RAPID  TRANSIT  COMPANY  OF  NEW  YORK 

(Vol.  IV  (1913)  Reports  of  Public  Service  Commission  for  the 
First  District,  State  of  New  York.) 

Chapter  VI 

ARBITRATION 

Article  XXX.  If  the  Commission  or  the  Lessee  shall  de- 
sire to  submit  to  arbitration  any  matter  of  difference  arising 
under  any  provision  of  this  contract  in  respect  of  which  it  is 
therein  provided  an  arbitration  may  be  had,  then  such  matter 
of  difference  may  be  submitted  to  arbitration.  Such  arbitration 
shall  be  conducted  as  follows:  Either  the  City,  acting  by  the 
Commission,  or  the  Lessee,  may  give  written  notice  to  the  other 
that  it  requires  the  matter  arising  hereimder  to  be  submitted  to 
arbitration,  and  shall  at  the  same  time  name  a  disinterested  per- 
son as  an  arbitrator,  and  accompany  the  notice  by  a  written  ac- 
ceptance by  the  arbitrator  of  the  nomination.  Within  thirty  (30) 
days  after  the  receipt  of  such  notice,  the  party  receiving  the  same 
shall  name  a  disinterested  person  as  an  arbitrator,  and  give  writ- 
ten notice  of  such  nomination  to  the  other  party,  the  notice  to  be 
accompanied  by  a  written  acceptance  by  the  arbitrator  of  the 


APPENDICES  299 

nomination.  If  the  party  to  whom  notice  of  arbitration  is 
given  shall  not  so  nominate  an  arbitrator,  who  shall  so  accept, 
then  the  arbitrator  named  by  the  party  giving  the  first  notice  shall 
be  the  sole  arbitrator.  The  Commission  and  the  Lessee  shall 
upon  the  nomination  of  the  second  arbitrator  select  a  third  arbi- 
trator; but  if  they  fail  to  agTee  upon  such  third  arbitrator 
within  thirty  (30)  days  after  the  date  of  the  nomination  of 
the  second  arbitrator  nominated,  the  third  arbitrator  shall  be 
nominated  by  the  Chief  Judge  of  the  Court  of  Appeals  of  the 
State  of  New  York;  or  if  within  fifteen  (15)  days  after  being 
requested  by  either  the  Commission  or  the  Lessee  to  make  such 
nomination,  the  said  Chief  Judge  shall  decline  or  fail  to  make  a 
nomination,  then  an  arbitrator  shall  be  nominated,  upon  the 
request  of  the  Commission  or  the  Lessee  and  within  a  period  of 
fifteen  (15)  days  by  any  Associate  Judge  of  said  Court  of  Appeals 
in  order  of  seniority;  or  if  witliin  such  periods  the  said  Judges 
shall  decline  or  fail  to  make  a  nomination,  then  the  third  arbi- 
trator shall  be  nominated  by  the  President  or  Acting  President 
for  the  time  being  of  the  Chamber  of  Commerce  of  the  State 
of  New  York.  The  arbitrators  shall  hear  the  parties  and  their 
counsel  or  any  statements  or  evidence  which  the  parties  or  either 
of  them  desire  to  submit.  The  failm-e  to  give  the  notice  provided 
for  in  Article  XXIX  shall  not  preclude  the  party  failing  to  give 
such  notice  from  setting  up  counterclaims  growing  out  of  or  in- 
cident to  the  matter  as  to  which  the  other  party  shall  have  given 
such  notice.  Either  party  may,  upon  two  (2)  days'  notice 
(Saturdays,  Sundays  and  Holidays  excepted)  to  the  other,  bring 
on  the  subject  in  dispute  for  hearing  befoi-e  the  arbitrators. 
Within  thirty  (30)  days  after  such  hearing  commences,  unless 
such  time  shall  be  extended  for  good  cause  by  written  order  of 
the  arbitrators  or  a  majority  of  them,  the  arbitrators  shall  make 
their  determination  in  writing  in  duplicate,  one  to  be  delivered 
to  the  Commission  and  the  other  to  the  T>essee.  In  ease  any 
vacancy  shall  at  any  time  occur  by  reason  of  the  death,  resigna- 
tion or  inability  to  serve  of  any  arbitrator,  his  successor  shall  be 
nominated  in  the  same  manner  and  within  the  same  times  (during 
which  times  the  other  periods  of  time  prescribed  for  or  in  the 
course  of  the  arbitration  shall  be  suspended)  as  above  provided 
for  in  case  of  the  original  nomination  of  such  arbitrator  and  in 


300  APPENDICES 

case  the  successor  arbitrator  shall  not  be  nominated  ^athin  such 
times  the  remaining  arbitrator  or  arbitrators  shall  be  the  sole 
arbitrator  or  arbitrators.  Any  deteiTnination  by  a  majority  of  the 
arbitrators  shall  be  final  and  conclusive.  Every  such  arbitrator 
shall  be  deemed  to  be  employed  both  by  the  City  and  the  Lessee. 
The  fees  and  expenses  of  the  arbitrators  (including  necessary 
expenses  for  stenographic  and  clerical  services)  and  the  ex- 
penses of  the  parties  shall  be  assessed  as  the  arbitratoi-s  consider 
equitable  and  as  they  direct  in  their  award,  but  such  assess- 
ments so  made  shall  not  be  charged  to  cost  of  construction,  cost 
of  equipment  or  to  operating  expenses.  Every  such  arbitrator 
shall,  before  proceeding  to  consider  the  matter,  be  sworn  as 
nearly  as  may  be  in  the  same  manner  as  referees  in  actions  at 
law  are  required  to  be  sworn. 

Provided,  however,  that  if  in  any  case,  or  for  any  reason  an 
arbitration  cannot  validly  be  had  as  aforesaid,  then  the  City  or 
the  Lessee,  if  in  no  way  responsible  for  the  failure  of  the  arbi- 
tration, may  bring  such  action,  suit  or  proceeding  as  either  of 
them  may  be  advised  for  the  purpose  of  determining  any  of  tihe 
matters  for  which  an  arbitration  is  herein  provided. 

APPENDIX  E 

AKBITRATION  PROVISIONS  OF  UNITED  STATES  SHIPPING 
BOARD  CHARTER 

Bare  Boat  Form 

Arbitration — Thirteenth — Any  dispute  of  law  or  fact  arising 
under  this  "Bare  Boat  Foi-m,"  except  as  to  the  rate  of  hire  and 
the  compensation  for  actual  or  constructive  total  loss  of  the 
vessel  and  except  as  to  matters  expressly  left  to  be  decided  by 
the  United  States  Shipping  Board,  shall  be  referred  to  the  arbi- 
tration of  three  persons,  one  appointed  by  the  owner,  one  by  the 
United  States,  and  the  third  by  the  two  so  chosen.  They  may 
proceed  in  any  manner  determined  by  themselves,  and  their  de- 
cision, or  that  of  any  two  of  them,  shall  be  final,  and  for  the 
purpose  of  enforcing  any  award  hereunder  the  agreement  may 
be  made  a  rule  of  court.  Such  arbitration  shall  be  a  ooudition 
precedent  to  the  commencement  of  any  action. 


APPENDICES  301 

APPENDIX  F 

RULES  OF  THE  MUNICIPAL  COURT  OF  CHICAGO 
GOVERNING  AEBITRATIONS 

RULE  22  of  The  Municipal  Court  of  Chicago.  "Upon  the  filing  in  this  court  of  any 
instrument  of  submission  to  arbitration  of  any  controversy  existing  between  the  parties 
thereto,  with  the  written  consent  of  the  parties  to  such  filing,  the  court  shall  take  juris- 
diction of  the  parties  and  subject-matter  of  such  submission  without  the  filing  of  any 
praecipe,  statement  of  claim,  statement  of  set-off,  affidavit  of  claim,  answer,  affidavit  of 
merits  or  other  pleading.  From  time  to  time  during  the  pending  of  such  suit,  either  be- 
fore or  after  award,  any  party  or  arbitrator  may  submit  to  the  court  any  matter  of  law 
arising  in  the  proceedings  before  the  arbitrators  or  on  the  award,  and  the  court  shall 
thereupon  give  such  directions  or  enter  such  order  afifecting  matters  of  law  as  shall 
appear  to  be  in  accordance  with  law. " 

LAW  OF  1917  ON  ARBITRATION  AND  AWARDS.  The  Arbitration  and  Awards 
Act  of  1917  is  stated  below  in  abstract  form,  except  where  quotation  marks  show  exact 
copies  of  the  law: 

Sec.  I.  One  or  more  arbitrators  may  be  appointed  to  hear  any  existing  controversy. 

Sec.  2.  Contract  of  submission  may  designate  the  number  of  arbitrators,  one  or  more, 
as  the  parties  shall  agree,  the  manner  in  whjch  they  may  be  appointed  and  vacancies 
filled,  the  time  and  place  of  hearing  and  rules  for  the  hearing  of  the  controversy.  "The 
parties  to  such  submission  may  include  by  reference  in  said  written  submission  the  pub- 
lished rules  of  any  organization  or  association,  which  rules  shall  thereby  become  a  part 
of  the  contract  of  submission." 

Sec.  3.  "A  submission  to  arbitration  shall,  unless  a  contrary  intention  is  expressed 
therein,  be  irrevocable." 

Sec.  4.  Arbitrators  to  administer  oaths,  subpoena  witnesses,  subpoenas  to  be  served 
by  officer  or  other  person. 

Sec.  5.  May  take  depositions. 

Sec.  6.  "The  arbitrators  m.ay,  of  their  own  motion  and  shall  by  request  of  a  party: 

(a)  At  any  stage  of  the  proceedings  submit  any  question  of  law  arising  in  the  course  of 
the  reference  for  the  opinion  of  the  court  stating  the  facts  upon  which  the  question  arises 
and  such  opinion  when  given  shall  bind  the  arbitrators  in  the  making  of  their  award. 

(b)  State  their  final  award  as  to  the  whole  or  a  part  of  the  reference  in  the  form  of  a 
conclusion  of  fact  for  the  opinion  of  the  court  on  the  questions  of  law  arising  and  such 
opinion  shall  finally  conclude  the  proceeding,  except  as  by  this  Act  otherwise  provided." 

Sec.  7.  "The  award  of  the  arbitrators,  or  a  majority  of  them,  shall  be  drawn  up  in 
writing  and  signed  by  the  arbitrators  or  a  majority  of  them;  the  award  shall  definitely 
deal  with  all  matters  of  difference  in  the  submission  requiring  settlement,  but  the  arbi- 
trators may,  in  their  discretion,  make  a  partial  award  or  awards,  which  shall  be  enforce- 
able in  the  same  manner  as  the  final  award;  upon  the  making  of  such  award,  the  arbitra- 
tors shall  deliver  a  true  copy  thereof  to  each  of  the  parties  thereto  without  delay. ". 

Sec.  8.  Award  may  be  filed  in  court  within  one  year. 

Sec.  9.  "The  party  filing  such  award  may,  by  giving  ten  days'  notice  of  his  intention 
to  the  opposite  party,  and  if  no  legal  exceptions  are  taken  to  such  award,  have  judgment 
thereon,  as  on  the  verdict  of  a  jury;  upon  any  legal  exceptions  taken,  the  findings  of  fact 
by  the  arbitrators  shall  be  conclusive;  successive  judgments  in  the  same  case  may  be 
entered  on  successive  awards  of  the  arbitrators  on  the  subject  matter  of  the  submission 
together  with  the  costs  of  arbitration  and  the  court,  and  execution  may  issue  as  in  other 
cases." 

Sec.  10.  Court  may  compel  performance  of  award. 

Sec.  II.  Award  may  be  set  aside  for  error  in  law  or  for  fraud,  corruption  or  other 
undue  means,  or  because  arbitrators  misbehaved. 

Sec.  12.  Award  may  be  modified  or  corrected  if  award  is  upon  matters  not  submitted. 

Sec.  13.  Applications  to  set  aside  award  must  be  made  before  final  judgment. 

Sec.  14.  Writs  of  error  and  appeals  may  be  taken  from  any  decision  of  the  court  on 
questions  of  law  as  in  other  cases. 

Sec.  15.  "The  parties  may,  in  the  submission,  agree  uf>on  the  amount  of  compensa- 
tion to  be  paid  to  the  arbitrators  and  the  term.s  of  the  payment  of  the  same;  unless  so 
agreed,  each  arbitrator  shall  be  allowed,  for  every  day's  attendance  to  the  business  of 
his  appointment  $3 .  00,  to  be  paid  in  the  first  instance  by  the  party  in  whose  favor  the 
award  shall  be  made,  but  to  be  recovered  of  the  other  party  with  the  other  costs  of  suits, 
if  the  award  or  final  decision  shall  entitle  the  prevailing  party  to  recover  costs.  Sheriffs, 
Constables,  the  Bailiff  of  The  Municipal  Court  of  Chicago,  clerks  and  justices  of  the 
peace  shall  be  entitled  to  the  same  fees  for  services  performed  in  relation  to  any  arbitra- 
tion, as  shall  be  allowed  by  law  for  the  like  services  in  their  respective  courts. " 

Sec.  16.  Court  may  compel  arbitrators  to  proceed  to  hearing  and  make  report  with- 
out unnecessary  delay. 

Sec.  17.  The  word  "court"  used  in  the  Act  means  the  court  named  in  the  submission 
or  if  no  court  be  named,  any  court  having  jurisdiction. 

»•    "  'Submission'  means  a  written  agreement  to  submit  differences  to  arbitratioQi 
whether  such  differences  be  in  whole  or  in  part  in  suit  or  not  in  suit. ", 

Sec.  18.  Old  Arbitration  act  repealed. 


30a  APPENDICES 


APPENDIX  G 

rOEM    OF   SUBMISSION   TO    ARBITRATION    USED    IN    THE 
MUNICIPAL  COURT  OF  CHICAGO 

THE  MUNICIPAL  COURT  Submission  to  Arbitration 

^^  cS  OT  ChkagS^^'  )  ^-     ^"  ^**  Municipal  Court  of  Chicago 


and  V  Submission  to  Arbitration.     No. 


WHEREAS,  a  controversy  exists  between and 

parties  to  this  instrument,  which  briefly  stated  is  as  follows: 


NOW,  THEREFORE,  this  agreement,  made  this day  of A.D. 

igi. .,  by  and  between and 

WITNESSETH:  That  the  parties  hereto  submit  the  above  mentioned  contrpversy 
to  arbitration,  and  to  that  end  they  appoint  arbitrator  as  follows: 

Said  arbitrator  shall,  after  having  taken  the  oath  as  arbitrator  in  the  form  attached  to 
this  instrument,  proceed  with  all  convenient  speed  to  hear  the  allegations,  evidence  and 
argurnents  of  the  respective  parties  hereto.  Said  arbitrator  shall  conduct  proceedings  in 
all  .things  pursuant  to  the  laws  of  the  State  of  Illinois  and  the  practice  of  The  Municipal 
Court  of  Chicago,  Rule  22  of  said  court  being  hereby,  by  reference,  included  in  this  sub- 
mission and  made  a  part  hereof. 

It  is  further  agreed  that  this  instrument  of  submission  to  arbitration  may  be  filed  in 
The  Municipal  Court  of  Chicago  either  by  the  arbitrator  of  his  own  motion  or  by  one  of 
the  parties  to  this  instrument,  notice  thereof  being  given  to  all  parties  to  this  submission 
and  to  said  arbitrator,  and  such  filing  in  said  Municipal  Court  of  Chicago  shall  be  deemed 
a  filing  with  the  written  consent  of  the  parties  to  this  submission  in  accordance  with  law 
and  the  practice  of  said  court,  and  the  court  shall  thereupon  take  jurisdiction  of  the 
parties  and  subject-matter  of  this  submission  without  written  pleadings,  in  accordance 
with  the  practice  of  said  court. 

It  is  further  agreed  that  a  judgment  or  successive  judgments  of  said  Municipal  Court 
shall  be  rendered  upon  any  award  or  awards  made  pursuant  to  this  submission. 

It  is  further  agreed  that  the  compensation  of  said  arbitrator  shall  be  as  follows: 

Said  compensation  shall  be",  taxed  as  costs  and  made  a  part  of  said  judgment  in 
favor  of  the  successful  party  and  against  the  unsuccessful  party. 

IN  WITNESS  WHEREOF  the  parties  hereto  have  hereunto  set  their  hands  and  seals 
the  day  and  year  first  above  written. 

[Seal] 

[SealJ 

(corporations  must  attach  their  corporate  seals) 


OATH    OF    ARBITRATOR 


STATE  OF  ILLINOIS,  ] 
County  of  Cook,       [ss. 
City  of  Chicago.       J 

I who  have  been  appointed  arbitrator 

by  the  above  instrvunent  of  submission  to  arbitration,  being  duly  sworn  on  oath  say 
that  I  will  faithfully  and  fairly  hear,  examine  and  determine  the  cause  and  controversy 
mentioned  in  the  foregoing  instrument  of  submission  to  arbitration,  according  to  the 
principles  of  equity  and  justice,  and  make  a  just  and  true  award  according  to  the  best 
of  my  understandmg. 
Subscribed  and  Sworn  to  before  me  this day  of 

A.D.  191 


APPENDICES  303 

APPENDIX  H 

LIST  OF  TRADE  ORGANIZATIONS  IN  CHICAGO  AGREEING 
TO  PROMOTE  TRADE  ARBITRATIONS 

Chicago  Stock  Exchange. 
Chicago  Board  of  Trade. 
Chicago  Butter  and  Egg  Board. 
The  Chicago  Masons'  and  Builders'  Association. 
Chicago  Master  Steam  Fitters'  Association. 
The  Independent  Oil  Men's  Association. 
The  International  Stamp  Manufacturing  Association. 
The  Lumbermen's  Association  of  Chicago. 
National  Association  of  Chair  Manufacturers. 
National  Association  of  Steel  Furniture  Manufacturers. 
The  Illinois  Lumber  and  Builders'  Supply  Dealers'  Association. 
Chicago  Bottlers'  Clearing  House  Association. 
Chicago  Jewelers'  Association. 
Chicago  Master  Plumbers'  Association. 
The  Illinois  Bankers'  Association. 

The  International  Association  of  Manufacturing  Photo  Engrav- 
ers. 

Live  Poultry  and  Dairy  Shippers'  Traffic  Association. 

Manufacturers  and  Dealers'  Association. 

National  Association  of  Employing  Lithographers. 

National  Association  of  Tanners. 

National  Metal  Trades  Association. 

The  Central  Supply  Association. 

Northwest  Ladies'  Garment  Manufacturers'  Association. 

The  Wholesale  Clothiers'  Association. 

American  Association  of  Creamery  Butter  Manufacturers. 

Association  of  American  Portland  Cement  Manufacturers. 

American  Garage  and  Auto  Dealers. 

Chicago  Bar  Association. 

American  Washing  Machine  Manufacturers  Association. 

Bridge  Builders'  Society. 

Building  Managers'  Association. 

National  Poultry,  Butter  and  Egg  Association. 

The  Pattern  Makers'  Association  of  Chicago. 


304.  APPENDICES 

Printing  Trades  Credit  Association. 
American  Association  of  Engineers. 
The  Cai-penter  Contractors'  Association  of  Chicago. 
Chicago  Association  of  Commerce. 
Industrial  Club  of  Chicago. 
Building  Construction  Employers'  Association. 
Chicago  Building  Trades  Council. 
California  Vegetable  Union. 
Chicago  Coal  Merchants'  Association. 
Chicago  Landlords'  Agency. 
Chicago  Produce  Trade  and  Credit  Association. 
Credit  Bureau  Millinerj-  Jobbers'  Association. 
Employing  Plasterers  ContractoiV  Association  of  Chicago. 
Hickory  Products  Association. 
Illinois  Society  of  Ai-chitects. 
International  Association  of  Rotary  Clubs. 
Landlords'  Association. 

Chicago  Contracting  Team  Owners'  Association. 
Chicago  Furniture  Manufacturing  Association. 
Chicago  Laundrs'men's  Association. 
Chicago  Retail  Druggists  Association. 
Employing  Electrotypers'  Association. 
Fibre  Shipping  Container  Association. 
Illinois  Manufacturers'  Association. 
Illinois  and  Wisconsin  Retail  Coal  Dealers'  Association. 
Investment  Bankei's  Association  of  America. 
Chicago  Retailei's'  Association. 
Manganese  Steel  Foundei^'  Society. 
Maple   Flooring  Manufacturer'    Association. 
Master  Roofers'  Association  of  Chicago. 
Milk  Producers'  Association. 
Motor  Truck  Ownei-s'  Association. 

National   Association   of  Advertising   Specialty  Manufactur- 
ers, 
National  Association  of  Retail  Druggists. 
National  Hardwood  Lumber  Association. 
Retail  Merchants'  Association. 
Western  Society  of  Engineers. 
Manufacturers  and  Importer'  Association  of  America. 


APPENDICES  305 

MssTcT  Car  Bidlders'  Ai5^:>::srl:n. 
Middle  Stales  Wrapri::^  FiziT  A^i-x-iaricHL. 
ilillers  yaricnsl  Federanon. 
Narici^  Ass->ciancn  of  Master  Bakers. 

Xatictial   Asso;iar":n   cf  Upholstered  Ftimitiire  MauafMtar- 
es. 
Xatioral  Ccr_feetioners"  Assodador. 
Xatioral  Founders'  Asodatioru 
Xaticnal  Inplenert  and  TeHele  Ass-Mli'.itn. 
ShipZ'cT?'  Tra^e  Assc-datioii, 
Chiea^.''  Fa«  Brick  Assodatioii. 
Chicar:'  Bzildine  Material  Credit  Bureati. 
Xational  Retail  Grx-ers'  Assodadon, 
Chica^^?  A55-:»eiatioii  of  Credit  Men. 
Chicago  District  Ice  Assodatioii. 
CMca^  Paint,  Oil  and  Tamisli  Assodadoo. 
Betail  HardiPare  Dealers'  Assoeianon- 
Cbieago  Butdbers  and  Groeers*  AssodadoiL. 
Illinois  ICanxifaetiirers'  Ass-xiadon. 
Whoksale  Flwists*  Credit  Asodadoru 
Paint,  Oil  and  Varnish  Clab  of  Ciicago. 
Director  of  PnMidty  for  yanorial  Assodadon  of  Retail  Drog- 


Direetor  of  PabHdty  for  CMca^  Masons  and  Builders'  Aso- 
Amffrifan  Association  of  Engmees. 


APPEyDIX  I 

BULES   FOB   AEBITBATION  KOW   EN"  OPESAIIOX   EN'   THE 
MTNICrPAL  COTTET  OF  THE  CTTT  OF  NTW  TOBK 

Pmnmamt  to  gmb-divisiom  sir  of  secium  six  amd  sub-division  six 
of  section  eight  of  tTte  Mmnicipdl  Court  Code,  the  Board  of 
Justices  of  ike  Munieipai  Court  of  the  City  of  Nev  York,  hereby 
»ta6Ksfc  •  sifstem  of  arbUraiion  and  adopt  the  following  tides: 


306  APPENDICES 

Rule  I 

The  parties  to  any  controversy,  except  infants  and  incom- 
petents, may  submit  the  same  for  arbitration  to  a  Justice  of  this 
Court  or  to  any  other  person  upon  whom  they  shall  agree. 

Bule  II 

The  persons  desiring  an  arbitration  shall  sign  a  consent  which 
shall  contain  the  name  of  the  arbitrator,  a  brief  recital  of  the 
nature  of  the  controversy  to  be  determined  and  a  statement  that 
they  will  abide  by  these  rules.  The  consent  must  be  filed  with 
the  clerk  of  one  of  the  districts,  which  district  shall  be  the  proper 
district  for  all  further  proceedings,  and  a  copy  thereof  shall  be 
given  by  the  parties  to  the  arbitrator. 

Rule  III 

The  arbitrator  shall  forthwith  proceed  to  hear  the  contro- 
versy. He  shall  not  be  bound  by  the  rules  of  evidence,  but  may 
receive  such  evidence  as  seems  to  him  equitable  and  proper. 
Either  party  may  be  represented  by  counsel,  but  no  record  of 
the  proceedings  before  the  arbitrator  shall  be  kept.  No  expense 
shall  be  incurred  by  him  except  upon  the  consent  in  writing  of 
the  parties. 

Rule  IV 

After  the  first  hearing  neither  party  may  withdraw  from  the 
arbitration  unless  both  parties  consent  to,  or  the  arbitrator  di- 
rects a  discontinuance  of  the  proceeding. 

Rule  V 

The  arbitrator  shall  make  his  award  in  writing  and  file  the 
same  forthwith,  together  with  Ms  opinion,  if  any,  with  the  clerk 
of  the  proper  district.  Unless  both  parties  file  a  request  in 
writing  not  to  enter  judgment,  the  clerk  shall  within  two  days 
after  the  filing  of  the  award  enter  judgment  in  accordance  there- 
with, provided  the  award  has  been  filed  within  thirty  days  from 
the  date  of  filing  the  consent.     The  time  within  which  the  clerk 


APPENDICES  SOT 

shall  enter  judgment  may  be  extended  by  a  stipulation  in  writing 
for  a  further  period  of  not  to  exceed  thirty  days. 

Rule  VI 

The  clerk  in  each  district  shall  keep  a  docket  wherein  proper 
entries  of  all  proceedings  shall  be  made. 

Rule  VII 

No  fees  or  disbursements  of  any  kind  shall  be  demanded  or 
received,  except  as  hereinabove  provided. 

FORMS 

The  consent,   award  and  judgment  must  be  in  substantially 
the  following  form,  the  blanks  being  properly  filled : 

Consent 

Municipal  Court  of  the  City  of  New  York. 

Borough  of District. 

We,   residing  at 

and   residing  at 

hereby   designate    

as  arbitrator  to  hear  and  determine  the  following  controversy 
existing  between  us,  viz.: 


We  agree  that  the  arbitrator  proceed  in  accordance  with  the 
rules  of  the  Municipal  Court  of  the  City  of  New  York  and  do 
hereby  declare  that  we  know  said  rules  and  that  we  will  abide 
by  them. 


Dated  191 


308  APPENDICES 

Award 

I, ,  the  arbitrator  appointed 

pursuant  to  a  consent  signed  by and 

and  filed  in  the 

office  of  the  Clerk  of  the  Municipal  Court  for  the 

District,  Borough  of ,  on  the 

day  of ,  191 . . . . ,  to  hear  and  determine 

the  controversy  therein  specified,  hereby  certify  that  I  have 
heard  the  parties  to  said  controversy  and  the  evidence  submit- 
ted by  them  and  find  and  decide  that 


Dated,  New  York,  191 

Arbitrator. 

Judgment 

Upon  the  consent  filed  on  the ..day  of 

191    ,  and  the  award  of arbitrator, 

filed  on  the day  of 191      ,  judgment  is 

entered  ^  in  favor  of against 

for   the   sum   of 

Dollars   ($  ). 

Dated  191 

Clerk. 
^  Or  insert  such  other  judgment  in  accordance  with  the  award. 


BIBLIOGRAPHY 


General 

Aristotle:     The  rhetoric   of  Aristotle;   a  translation   by   Sir 

Eiehard  C.  Jebb,  edited  by  J.  E,  Sandys.    Cambridge :    Univ. 

Press,  1909.    207  p.  24,  25. 

Cyclopedia  op  Law  and  Procedure.  Popular  ed.  William  Mack, 

editor  in  chief.    New  York:  The  Amer.  Law  B'k  Co.,  1909-12. 

12  V.  93. 

The  Encyclopedia  Britannicaj  a  dictionary  of  arts,  sciences, 

literature  and  general  information.     11th  ed.     Cambridge: 

Univ.  Press,  1911.    29  v. 

37,  84,  102,  119,  132,  135,  137,  154,  184,  210,  212. 
Harvard  Law  Review.    Cambridge:    Harvard  Law  Rev.  Assoc. 

13. 
The  Holy  Bible,  containing  the  Old  and  New  Testaments. 

Oxford :    Univ.  Press,  1833.    1271  p.  280. 

London  Law  Journal.  V.  44,  Feb.  20,  1909.  12. 

London  Times:  editorial,  May  8,  1891.  8. 

New  York  Law  Journal.    New  York:  1888.  125. 

New  York  State  Bar  Association:     Proceedings  of  the  40th 

annual  meeting,  1917,  and  reports  for  1916.    Albany:     The 

Argus  Co.,  1917.    879  p.  234. 

Penny  Cyclopedia.    London :    C.  Knight,  1833-43. 

27  V.  in  14.    24,  28,  29. 
Yale  Law  Journal.    New  Haven^  Conn.,  1890.  40. 

Agency 

Story,  Joseph:  Commentaries  on  the  law  of  agency,  as  a 
branch  of  commercial  and  maritime  jurisprudence.  Boston: 
Little  &  Brown,  1839.    544  p.  96. 

309 


310  BIBLIOGRAPHY 

Arbitration  and  Awards 

Arbitration  as  a  Condition  Precedent,  (Harvard  Law  Re- 
view, Vol.  II,  Dec,  1888,  p.  234.)  202,  226. 

Bacon,  Matthew:  The  Compleat  Arbitrator;  or,  the  law  of 
awards  ...  3d  ed.,  with  precedents  of  submissions,  awards 
and  pleadings  in  English  .  .  .  London,  1770.    281  p. 

39,  93,  279. 

Bell,  John  Montgomerie:  Treatise  on  the  law  of  arbitration 
in  Scotland.  2d  ed.  With  an  appendix  of  forms.  Edin- 
burgh :     T.  &  T.  Clark,  1877.    460  p. 

7,  25-28,  58,  59,  133,  166. 

Billing,  S.:  A  practical  treatise  on  the  law  of  awards  and 
arbitrations,  with  forms  of  pleadings,  etc.     London:     1845. 

37. 

Chamber  of  Commerce,  N.  Y.  S.,  Committee  on  Arbitration: 
Report,  1917.  9. 

Champlair:  L'ami  de  la  Concorde;  on,  Essai  sur  les  motifs 
d'eviter  les  proces,  et  sur  les  moyens  d'en  tarir  la  source. 
Paris :    Monory,  1779.    80  p.  31. 

Charmolu,  a.  :  La  Justice  gratuite  et  rapide  par  I'arbitrage 
amiable.  Paris:  V.  Giard  et  E.  Briere,  1898.  128  p.  (Pe- 
tite encyclopedic  sociale,  economique  et  flnanciere.  v.  25.)     32. 

Fletcher,  Banister  :  Arbitrations :  a  text  book  for  surveyors, 
in  tabulated  form.  2d  ed.  London:  B.  T.  Batsford,  1893. 
119  p.  34. 

Goubeau  de  la  Billennerie:  Traite  general  de  Tarbitrage  en 
matiere  civile  et  commerciale;  ou,  Recueil  complet  des  rfegles 
a  suivre  tant  par  les  parties  que  par  les  arbitres.  Tome  1-2. 
Paris :    Renard,  1829-34.    2  v.  33. 

Hopkins,  Manley:  A  handbook  of  Average,  for  the  use  of 
agents,  merchants,  ship-owners,  masters  and  others:  with  a 
chapter  on  arbitration,  recent  decisions  in  the  courts  bear- 
ing on  these  subjects.  2d  ed.  London:  Smith,  Elder  & 
C©.,  1859.  34. 

Irons,  J.  C,  and  R.  D.  Melville:  Treatise  on  Law  of  Arbitra- 
tion in  Scotland;  with  an  appendix  of  forms  and  excerpts 
from  statutes  relating  to  arbitration.  Edinburgh :  W.  Green 
and  Son,  1903.  38. 


BIBLIOGRAPHY  311 

Kyd,  Stewart:  A  treatise  on  the  law  of  awards.  Dublin: 
Printed  by  J.  Stoekdale,  etc.    1791.    251  p. 

29,  30,  31,  93,  94,  105,  107,  114,  280. 

March,  John:  Actions  for  slander  or  a  methodical  collection 
under  certain  grounds  and  heads,  of  what  words  are  action- 
able in  the  law,  and  what  not.  To  which  is  added,  awards  or 
arbitrements  methodised  under  severall  grounds  and  heads, 
etc.    London:     1647.    n.p. 

53,  54,  55,  56,  57,  93,  99,  106,  116,  117. 

Morse,  J.  T.,  Jr.  :  The  Law  of  arbitration  and  award.  Boston : 
1872.  38,  93,  159. 

Parker,  J. :  Notes  on  the  Law  of  Arbitration  ...  2d  ed.  Edin- 
burgh, 1845.  37. 

Rigaud,  F. :  Expertises  et  arbitrages.  Paris:  Gauthier-Villars, 
[1902  ?]  177  p.  (Encyclopedic  scientifique  des  aide-me- 
moire.— [Sec.  de  I'ingenieur.] )  34. 

Rosenbaum,  Samuel:  A  Report  on  Commercial  Arbitration  in 
England,  by  Samuel  Rosenbaum.  .  .  .  Oct.,  1916.  American 
Judicature  Soc.  Bui.  no.  12.  [Chicago].  Chicago  Legal  News 
Co.,  1916.    3-72  p.  8,  9,  18-23,  245,  253. 

Watson,  Sir  W.  H.  :  Treatise  on  the  law  of  arbitrations  and 
awards.    Philadelphia:    1836.     (Law  Lib.  v.  11.)  93. 

Wilson,  John  :  A  Short  treatise  on  the  law,  relative  to  arbitra- 
tion. Containing  adjudged  cases  .  .  .  Hull:  printed  for  the 
pub.,  1792.     255  p.  93. 

Wood,  J.  P.,  and  J.  R.  N.  Macphail:  The  Law  of  Arbitration 
in  Scotland.    Edinburgh:    Bell  &  Bradfute,  1900.  37. 

Assumpsit 

Ames,  J.  B. :  The  history  of  assumpsit.  ( Select  Essays  in  Anglo- 
American  History.  V.  3,  p.  257-303.  Boston:  Little, 
Brown  &  Co.,  1909.)  66,  67,  68. 

Bailments 

Jones,  Sir  William:  Essay  on  the  law  of  bailments.  4th  ed., 
with  notes  by  W.  Theobald.    London :    1833.  137. 


312  BIBLIOGRAPHY 

Bar 

Root,  Elihu:  The  layman's  criticism  of  the  lawyer.  (Report 
of  American  Bar  Assoc,  Vol.  39,  p.  386-402.  Baltimore: 
The  Lord  Baltimore  Press,  1914.)  2. 

Biography 

Campbell,  John:  Lives  of  the  Chief  Justices  of  England.  3d 
ed.    4  V.    London :    J.  Murray,  1874.  71,  72,  75. 

Foss,  Edward:  The  Judges  of  England,  with  sketches  of  their 
lives.    London :    1848.    9  v. 

123,  134,  135,  136,  142,  143,  255,  256. 

Commercial  Law 

Boucher,  P.  B. :  Consolato  del  mare,  ou,  Pandectes  du  droit 
commercial  et  maritime  .  .  .  d'apres  I'edition  originale  de 
Barcelonne,  de  Tan  1494.  Paris:  Chez  A.  Bertrand,  1808. 
2  V.  26. 

Holdsworth,  W.  S.:  The  Law  Merchant.  (Select  Essays  in 
Anglo-American  Legal  History.  V.  1,  p.  289-331.  Boston: 
Little,  Brown  &  Co.,  1907.)  83. 

ScRUTTON,  T.  E. :  General  survey  of  the  history  of  the  law  mer- 
chant. (Select  Essays  in  Anglo-American  Legal  History. 
V.  3,  p.  7-15.    Boston:    Little,  Brown  &  Co.,  1909.) 

72,  73,  74. 

Smith,  J.  W. :  A  compendium  of  mercantile  law  .  .  .  10th  ed. 
edited  by  J.  Macdonell  .  .  .  and  G.  Humphreys  .  .  .  Lon- 
don: Stevens  &  Sons,  Ltd.    1890.    2  v. 

3,  4,  71,  75,  76,  81,  82. 

Contracts 

Greenhood,  E.  :  The  doctrine  of  public  policy  in  the  law  of  con- 
tracts .  .  .  Chicago:     Callaghan  &  Co.,  1886.    860  p.        14. 

Page,  W.  H. :  The  law  of  contracts.  Cincinnati:  The  W.  H. 
Anderson  Co.,  1905.  60,  70. 

Parsons,  T. :  The  law  of  contracts.  4th  ed.  Boston:  Little, 
Brown  &  Co.,  1860.    2  v.  14,  15. 


BIBLIOGRAPHY  313 

Pollock:  Principles  of  Contract  at  Law  and  Equity.  Gth  ed. 
760  p.    London:     Stevens  &  Sons,  1894.  67. 

Slaymakor,  G.  B.  :  The  Legality  of  contracts  affecting  the  juris- 
diction of  Courts.    (Central  Law  Jour.    Vol.  58,  p.  64.)       17. 

Courts 

Civil  Judicial  Statistics  1912.  (Parliamentary  Papers,  Cd. 
7267.)     London  :  Wyman  &  Sons,  Ltd.,  1914.    156  p.        22. 

Ransom,  William  L.  :  The  Organization  of  the  Courts  for  better 
administration  of  justice.  (Cornell  Law  Quarterly.  P.  186- 
261,  264-265.     Ithaca,  1917.) 

Story,  Joseph:  Commentaries  on  equity  jurisprudence,  as  ad- 
ministered in  England  and  Ameiica.  13th  ed.  by  Melville 
M.  Bigelow  .  .  .  Boston:     Little,  Brown  &  Co.,  1886.    2  v. 

149,  237. 

ZoucHE,  Richard  :  The  jurisdiction  of  the  Admiralty  of  England 
asserted  against  Sr.  Edward  Coke's  Articule  admiralitatis 
in  XXII  Chapter  of  his  Jurisdiction  of  courts.  London: 
Printed  for  F.  Tyton,  &  T.  Dring,  1663.    152  p.  72. 

Denmark  and  Norway 

Catteau  Callville  :  Tableau  des  Etats  danois  envisages  sous  les 
Rapports  du  Mecanisme  Social.    Paris:    102.  3v.  29. 

England 

Domesday  Book  :  or,  the  great  Survey  of  England  of  William  the 
Conqueror,  A.  D.  MLXXXVI.  Photo-Zincographed  by  her 
Majesty's  command,  at  the  Ordnance  Survey  Office,  South- 
ampton :    Colonel  Sir  H.  James,  director.    Lat.  35  Pts.        7. 

Gilds 

Gross,  Charles:  The  gild  merchant;  a  contribution  to  British 
municipal  history.    Oxford:     Clarendon  Press,  1890.    2  v. 

4,5. 
India 

Hodgson,  B.  H.  :  Miscellaneous  essays  relating  to  Indian  sub- 
jects .  .  .  London :    Trubner  &  Co.,  1880.    2  v.  36, 


314  BIBLIOGRAPHY 


Insurance 
Park:     A  system  of  the  law  of  Marine  Insurances  .  .  .  8th  ed. 
with  considerable  additions,  by  F.  Hildyard.    London :  1842. 
2  V.  72. 

Japan 

Brinkley,  Frank  :    Japan,  its  history,  arts  and  literature.    Bos- 
ton:   J.  B.  Millet  Co.  [cop.  1901-02.]     9  v.     (Oriental  Se- 
ries.   V  1-8.)  36. 
Law 

Abbot,  Everett  V.:  Justice  and  the  modern  law.  Boston: 
Houghton  Mifflin   Co.,  1913.     299  p.  124. 

Blackstone,  William:  Commentaries  on  the  laws  of  England. 
8th  ed.     Oxford:     Clarendon  Press,  1778,    4  v.  65,  73. 

BowEN,  C.  S.  Christopher:  Progress  in  the  Administration  of 
Justice  during  the  Victorian  Period.  (Select  Essays  in  An- 
glo-American Legal  Histoi-y.  Vol.  1,  p.  516-557.  Boston: 
Little,  Brown  &  Co.,  1907.)  40. 

Brookes  Abridgements.  Brook,  Sir  Robert:  La  graunde 
abridgement  .  .  .  1586.    2  v.  in  1.    n.t.p.    99,  106,  107,  117. 

Carter,  A.  T,  :  A  history  of  English  legal  institutions,  4th  ed. 
London:    Butterworth  &  Co.,  1910.    304  p. 

2,  5,  7,  71,  77,  78,  79,  80,  81,  137. 

Coke,  Sir  Edward  :  The  Reports  of  Sir  E.  C.  New  edition  with 
notes  and  references  by  I.  H.  Thomas  and  I.  F.  Eraser.  6 
V.     London:     1826-27.  85,  86,  87. 

Evans,  W.  D.  :  Collection  of  statutes.  3d  ed.  By  A.  Hammond 
and  T.  C.  Granger.    10  v.    London :    1836.  149. 

Fitzherbert,  Anthony:  Graund  Abridgement  Collect,  In  Aedi- 
bus  Riehardi  Tottell  duodecimo  Nouembris,  1565.  Cum  priu- 
ilegio.  99,  106. 

Glanville,  Ranulp  de:  Tractatvs  de  legibus  &  consuetudinibus 
regni  Angliae,  tempore  regis  Henriei  Secundi  compositus, 
iusticial  gubemacula  tenente  illustri,  Et  illas  solum  leges  con- 
tinet  &  consuetudines  secundum  quas  placitatur  in  Curia  regis 
ad  scaecarium  &  coram  iusticijs  vbicunque  fuerint.  [Londini] 
in  aedibus  Thomae  Wight,  1604.     116  numb.  67. 

Hall,  R.  S.  :    Law  and  Logic     (Illinois  Law  Review,  Vol.  XII, 


BIBLIOGRAPHY  315 

No.  1,  p.  14.    May,  1917.    Chicago :    The  Northwestern  Univ. 
Law  Pub.  Assoc.)  50. 

HoLDSWORTH,  W.  S. :  A  history  of  English  law.  London: 
Methuen  &  Co.,  1903.  259. 

Holmes,  0.  W.,  Jr.  :  The  Common  law.  Boston :  Little,  Brown 
&  Co.,  1881.    422  p.  41,  66,  108,  109. 

Kent,  James:  Commentaries  on  American  law.  13th  ed.  Bos- 
ton :    Little,  Brown  &  Co.,  1884.    4  v.  42,  47. 

Pollock,  Sir  Frederick,  and  F.  W.  Maitland:  The  Histoi-y  of 
English  law  before  the  time  of  Edwai'd  I.  (2nd  ed.)  Cam- 
bridge:   Univ.  Press,  1903.    2  v.  60,  61,  69,  84,  85. 

Reeves,  John  :  Reeves'  History  of  the  English  law,  from  the 
time  of  the  Romans  to  the  end  of  the  reign  of  Elizabeth 
[1603].  A  new  American  ed.  Philadelphia:  M.  Murphy, 
1880.    5  V.  254,  255. 

Scott,  H.  W.  :  The  evolution  of  law,  a  historical  review  from 
the  earliest  known  history  of  mankind  to  the  present  era. 
4th  ed.  New  York:  The  Borden  Press  Publishing  Co.,  1908. 
25-165  p.  280. 

Select  Essays  in  Anglo-American  Legal  History  by  various 
authors.  Compiled  and  edited  by  a  Committee  of  the  As- 
sociation of  American  Law  Schools.  Boston :  Little,  Brown 
&  Co.,  1907.  3  V.  137. 

SouLE,  C.  C. :  The  lawyer's  reference  manual  of  law  books  and 
citations.    2d  thousand.    Boston :    C.  C.  Soule,  1884.    497  p. 

87,  136. 

Statham's  Abridgment  of  the  Law.  Translated  by  Margaret 
C.  Klingelsmith.    Boston :    Boston  Book  Co.,  1915.    2  v. 

84,  87,  99,  105,  106,  108. 

ViNER,  Charles:  General  Abridgment  of  law  and  equity,  with 
notes  and  references.  Aldershot  in  Hampshire  near  Fam- 
ham  in  Surrey.    1745.    23  v.  101,  128,  129. 

Legal  Maxims 

Broom,  Herbert:  A  selection  of  legal  maxims,  classified  and 
illustrated,  7th  American,  from  the  5th  London  ed.  Phila- 
delphia: T.  &  J.  W.  Johnson  &  Co.,  1874.    993  p.  40,  47. 


316  BIBLIOGRAPHY 

Municipal  Courts 

Lauer,  E.  J. :  The  New  Practice  and  Procedure  in  the  Munici- 
pal Court  of  the  City  of  New  York.  New  York:  Baker, 
Voorhis  &  Co.,  1916.    1069  p.  5,  7. 

Negotiable  Instruments 

Chalmers,  Sir  Mackenzie  D.  E.  S.:  A  digest  of  the  law  of 
bills  of  exchange,  promissory  notes  and  cheques,  and  nego- 
tiable securities.  6th  ed.  London :  Stevens  &  Sons,  Ltd., 
1903.     440  p.  72. 

Cranch,  W.  :  Promissory  Notes  before  and  after  Lord  Holt. 
(Select  Essays  in  Anglo-American  Legal  History.  V.  3, 
p.  72-97.    Boston:    Little,  Brown  &  Co.,  1909.)        138,139. 

Persia 

CuRZON,  G.  N. :  Persia  and  the  Persian  question.  London : 
1892.    2  V.  35. 

Reports 

Bbacton's  Note  Book.  A  collection  of  cases  decided  in  the 
King's  Courts  during  the  reign  of  Henry  the  Third,  an- 
notated. Edited  by  F.  W.  Maitland.  3  v.  Cambridge: 
[printed],  1887.  67,  73,  103,  104. 

Cary,  R.  :  Le  neeessarie  use  and  fruit  de  les  pleadings,  conteine 
en'le  lieur  de  le  tres  reverend  Edward  Coke.  Londini :  In 
aedibus  Thomae  Wight,  an  Dom.  1601.     Cum  privilegis. 

149. 

Corpus  Juris;  being  a  complete  and  systematic  statement  of  the 
whole  body  of  the  law  as  embodied  in  and  developed  by  all 
reported  decisions,  edited  by  Wm.  Mack  &  W.  B.  Hale. 
New  York :    Amer.  Law  Book  Co.,  1916.    15  v.  15. 

Kelyng,  Sir  John:  Report  of  Divers  cases  in  pleas  of  the 
crown,  adjudged  and  determined  in  the  reign  of  the  late 
King  Charles  II  with  directions  for  justices  of  the  peace. 
Dublin:    P.  Byrne,  1789.    151  p.  101. 

Law  Times  Reports.    London:    1871-etc.  22,29. 

Modern   Reports,   or   select  cases   adjudged   in   the  courts  of 


BIBLIOGRAPHY  317 

Kings  Bench,  Chancery,  Common-Pleas,  and  Exchequer, 
since  the  Restauration  of  His  Majesty  King  Charles  II. 
London :    T.  Basset,  1682.    314  p.  139. 

ROLLE,  Henry:  Un  Abridg-ment  des  plusieurs  Cases  et  resolu- 
tions del  common  Ley,  ovesque  un  table  des  general  titles 
contenus  en  ceo.    London :    1668.    2  v.  128. 

Selden  Society:  Select  pleas  in  manorial  and  other  seignorial 
Courts,  edited  by  F.  W.  Maitland.  London:  Bernard 
Quaritch,  1889.  (Vol.  1.  Reigns  of  Henry  III  and  Ed- 
ward I.)    214  p.  3. 

The  Solicitor's  Journal  and  Reporter.    London:    1857,  etc. 

22. 

Veeder,  Van  Vechten:  The  English  Reports  1537-1865.  (Se- 
lect Essays  in  Anglo-American  Legal  History.  V.  2,  p.  123- 
168.     Boston:    Little,  Brown  &  Co.,  1908.) 

121,  122,  137,  138,  139,  140,  141. 

Year  Books 

Ames  Foundation  Year  Book:  Year  Book  of  Richard  II 
.  .  .  ed.  for  the  Ames  Foundation  by  Geo.  F.  Deiser  .  .  . 
Cambridge:    Harvard  Univ.  Press,  1914.  112. 

HOLDSWORTH,  W.  S. :  The  Year  Book.  (Select  Essays  in  Anglo- 
American  Legal  History,  V.  2,  p.  96-122.  Boston:  Little, 
Brown  &  Co.,  1908.)  118,  119. 

Year  Books  of  the  Reign  op  King  Edward  the  First — years 
XX  and  XXI.  Edited  and  translated  by  Alfred  J.  Hor- 
wood.    London :    Longmans,  Green,  1866.    509  p.  118. 

Les  Reports  des  Cases  argue  et  adjudge  in  le  temps  del  Roy 
Edward  le  Second  et  auxy  memoranda  del  Exchequer  en 
temps  le  Roy  Edward  le  Primer.  London:  Atkyns,  1678. 
685  p.  and  index.  119,  121. 

Selden  Society:  Year  Books  of  Edward  11,  edited  by  F.  W. 
Maitland.    London :    Bernard  Quaritch,  1903.    9  v.  53. 

Soule:  Year  Book  Bibliography.  (Harvard  Law  Review,  Vol. 
XIV,  no.  8,  Apr.,  1901,  p.  557-587.)  125. 


TABLE  OF  STATUTES 


PAGES 

English  Arbitration  Act,  1889..  196,  212-213,  220,  221,  223,  224 

English  Common  Law  Procedure  Act  1854 196,  198,  199,  201 

English  Ordinance :   Rymer's  Foedera,  i.  75 225 

Statute— 13  Edw.  1,  Chapter  24 62 

20  Edw.  Ill,  Chapter  1 258 

27  Edw.  Ill,  Statutes  II,  Ch.  21 77,  78 

43  Eliz.  c.  12 81 

3  «&  4  Wm.  4,  c.  42 180,  190,  196 

8  &  9  Wm.  Ill   148,  149,  151 

9  &  10  Wm.  3,  c.  15 , 126,  191 

France :  Code  de  Procedure  Civil  (modem) 27 

France:  Royal  Ordonnanee  (1673),  Title  IV,  Art.  9 27 

Illinois  Law  of  Arbitration,  June  11,  1917 294-298 

New  York  State.     Code  of  Civil  Procedure,  Chapter  17, 

Title  VIII 249,  292-294 

Laws  1909,  Ch.  45,  Sec.  44,  as  amended 

by  L.  1914,  Ch.  507 43 

Laws  1874,  c.  278  6 

1875,  c.  495,  sec.  6 6 

1878,  c.  252  6 

Scotland  Law  of  Arbitration 28 

Railway  Clauses  Consolidation  Act,  1845 191 

United  States.    Comp.  Stat.  1916,  Sec.  10165,  Sec.  10295.  46 

Rev.  Stat.  Sec.  5392 46 

35  Stat,  at  L.  1088,  Chap.  321 46 


TABLE  OF  CASES 

PAGES 

Adinolfi  V.  Hazlett,  242  Pa.  25,  88  Atl.  869 13 

Agar  V.  Maeklew,  2  Sim.  &  Stu.  423 158 

Ames  V.  New  York  Union  Ins.  Co.,  14  N.  Y.  253,  262 17 

Anderson  v.  Erie  R.  R.  Co.,  171  App.  Div.  687 18 

Aston  V.  George  (1819),  2  B.  &  Aid.  395 84,  126,  168, 

183,  226,  227 

Auriol  V.  Smith,  Turn.  127 157 

Austrian  Lloyd  Steamship  Co.  v.  Gresham  Life  Assurance 

Society,  L.  R.  [1903]  7  K.  B.  D.  249,  72  L.  J.  (K.  B) 

211,  88  L.  T.  R.  6 17,  217,  220,  228,  245,  275 

Awards,  in  matter  of  deliverance  of,  3  Croke,  577-8 102 

Baird  v.  Baird,  145  N.  Y.  659 70 

Bank  V.  White,  220  Mo.  717,  736 16 

Barlow  v.  Ocean  Ins.  Co.,  4  Met.  270 14 

Belcher  v.  Roedean  School  Site  &  Buildings  Limited,  85 

L.  T.  R.  468  (1901) 215,  228 

Belfield  v.  Bourne  (1894),  8  R.  61  (1894),  L.  R.  [1894]  1 

Ch.,  63  L.  J.  (Ch.)  104 215 

Bennet  v.  Paine,  5  Watts  259 15 

Benson  v.  Eastern  Building  and  Loan  Assoc,  174  N.  Y. 

83  237,  277 

Benson  v.  United  States,  146  U.  S.  325,  36  L.  ed.  991,  13 

Sup.  Ct.  Rep.  60 46 

Bertles  v.  Nunan,  92  N.  Y.  152  (1883) 48 

Bishop  V.  Bishop,  15  Car.  1,  f.  59,  1641. 134 

Brakinrig  v.  Menzies,  4  Sess.  Cases,  2nd  Series,  274 166,  179 

Braunstein  v.  Accidental  Death  Ins.  Co.,  101  Eng.  Com. 

Law  R.,  783,  1  Best  &  Smith  782,  50  N.  Y.  250. . .  .184,  227, 

228,  229,  231 

Bremner  v.  Elder,  2  Sess.  Cases  (4th  Ser.)  136 199,  227 

Bridgman's  Case,  Hob.  11 82 

Bright  V.  Gibson,  32  T.  L.  R.  533 223,  272 

319 


320  TABLE  OF  CASES 

PAQG9 

Broeklehurst  &  Potter  Co.  v.  Marseh,  225  Mass.  3 277 

Erode  V.  de  Ripple  (1375).    49  Ed.  Ill,  8  &  9 124,  146, 

147,  205,  226 

Brown  v.  Overbiiry,  11  Exeh.  Rep.  715 178 

Brown  v.  Sloan,  6  Watts  321 14 

Browne  v.  Downing,  2  Rolle's  Reports 143,  205,  206,  226 

Burton  v.  Ellington,  3  Brown's  Rep't.  H.  C.  of  Chancery..  155 

Calcraft  v.  Roebuck,  1  Vesey,  Jr.  221 95 

Caledonian  Ins.  Co.  v.  Gilmour,  L.  R.   [1893]   App.  Cas. 

85  209,  228 

Caledonian  Railway  Co.  v.  Greenock  and  Wemyss  Bay  Rail- 
way Co.,  10  Sess.  Cases  (3rd  Ser.)   (1871-2),  892,...  191, 

227,  264 

Calvin,  case  of.    7  Rep.  4a 140 

Cahan  v.  Provincial  Insurance  Co.,  27  Up.  Can.  Q.  B.  403. .  15 

Came  v.  Moye,  2  Sid.  121 82 

Cameron  v.  Cuddy,  L.  R.   [1914]   A.  C.  651 223,  228 

The  Cap  Blanco,  83  L.  J.   (P.)  23   (1913) ;  109  L.  T.  R. 
672;  29  T.  L.  R.  557.     Evans,  P.  Appeal  withdrawn. 

See  83  L.  J.  (P.)  23,  C.  A 220,  228 

Contra  a  Carpenter.    Y.  B.  2  Hen.  IV.,  3  b.  &  4 64 

Christie  v.  Noble,  L.  R.  14  Ch.  D.  203 202 

Church-rate,  in  matter  of.    1  Lofft's  Rep.  426 129 

Clapham  v.  Higham,  1  Bingham  87 127,  252 

Clark  V.  Gamwell,  125  Mass.  428 15 

Clark  V.  Hamburg-American  Packet  Co.    (1913)    (unpub- 
lished)      249 

Clemens  v.  American  Fire  Ins.  Co.,  70  App.  Div.  435 17 

Gierke  v.  Mai'tin,  Craneh:     "Promissoi*y  Notes  Before  and 

After  Lord  Holt" 138 

Collins  V.  Locke,  L.  R.  4  App.  Cas.  674 203,  227 

Collins  V.  Oliver,  4  Humph.  (Tenn.)  439 57 

Couldery  v.  Bartrum,  19  Ch.  Div.  399 138 

Curtis  V.  Gokey,  68  N.  Y.  300 235 

Daley  v.  People's  Building,  Loan  &  Saving  Assoc.,  178 

Mass.  13 273,  276 

Davila  v.  Alraanza,  1  Salk.  73 145,  ]97 

Davis  V.  Getty,  Sim.  &  Stu.  414 157 


TABLE  OF  CASES  321 

PAGES 

Davis  V.  Starr,  60  Lit.  R.  797;  L.  R,  41  Ch.  D.  242 198, 

215,  227 

Dawson  v.  Fitzgerald,  L.  R.  1  Exch.  D.  257 193,  195,  212, 

227,  245,  277 

Dawson  v.  Sadler,  1  Sim,  &  Stu.  541 157 

Delaware  &  Hudson  Canal  Co.  v.  Pennsylvania  Coal  Co.,  50 

K  Y.  250  (Welch  v.  Probst  151  App.  Div.  147.  1912).  13, 
15,  70,  228,  232,  235,  238,  244,  249 
Dike  V.  Erie  Railway  Co.,  41  N.  Y.  113,  116;  45  N.  Y. 

113,  116   16,  241 

Dimsdale  v.  Robertson,  2  Jones  &  La  Touche's  Reports  58.  157, 
166,  169,  175,  190,  197,  205,  206,  222,  227,  233,  239,  243 
Doleman  &  Sons  v.  Ossett  Corporation,  L.  R.  [1912]  3  K. 

B.  D.  256,  257 151,  221 

Doyle  V.  Continental  Iiisur.  Co.,  94  U.  S.  535,  24  L.  Ed.  148  244 
Drew  V.  Drew,  2  Macqueen's   Cases  on   Appeal    (Scotch, 

1855)    59,  180,  190,  227 

Edwards  v.  The  Aberayron  Mutual  Ship  Insurance  Society 

(Limited),  L.  R.  1  Q.  B.  D.  563,  34  L.  T.  R.  457. .. .    192, 

195,  211,  214,  219,  221,  227,  277 

Egerton  v.  Brownlow,  4  H.  L.  C.  1 14,  177 

Eichner  v.  Bowery  Bank,  24  App.  Div.  63     45 

Eliot  National  Bank  v.  Beal,  141  Mass.  566 273 

Elliott  V.  Royal  Exchange  Assurance  Co.,  L.  R.  2  Exch. 

237  189,  193,  195,  227 

Engel  V.  Shubert  Co.,  N.  Y.  Supreme  Court,  App.  Div.,  1st 

Department,  166  App.  Div.  394,  V.  3071  Bar  Assoc. 

Reports   17,  278 

Erie  R.  R.  Co.  v.  Stone,  37  Sup.  Ct.  Rep.  633 17 

Exparte  Lucy,  21  E.  L.  &  E.  199 15 

Fahs  V.  Darling,  82  111.  142 16 

Fetherstone  v.  Cooper  (1803)  Per  Lord  Ch.  Eldon,  9  Vesey, 

Jr.  67,  67a 95 

Fisher  v.  May,  2  Bibb.  448 14 

Flannagan  v.  Kilcome,  58  N.  H.  443 15 

Foakes  v.  Beer,  9  App.  Cas.  605 137 

Fox  V.  The  Railroad,  3  Wall.  Jr.  243 15 

Fraser  v.  Ehrensperger,  L.  R.  12  Q.  B.  D.  310 196,  197,  227 


322  TABLE  OF  CASES 

PAOBS 

Fudickar  v.  Guardian  Mutual  Life  Ins.  Co.,  62  N.  Y.  392. .  234 

FuUam  v.  N.  Y.  Ins.  Co.,  7  Gray  61 18 

Gage,  Case  of,  5  Rep,  45b;  see  1  Salk.  53,  and  Will.  569 137 

Gaw  V.  British  Law  Fire  Ins.  Co.,  [1908]  1  I.  R.  245. . .  .195,  214 

218,  221,  228 

The  Genesee  Chief  v.  Fitzhugh,  12  Howard  443 42 

Gifford  V.  Livingston,  2  Denio  392 47 

Godfrey  v.  Moser,  66  N.  Y.  250 16 

Gould  V.  The  Hudson  River  Railroad  Co.,  6  N.  Y.  522 

(1852)    46 

Gourley  v.  Duke  of  Somerset,  19  Ves.  431 158 

Grand  v.  Livingston,  4  App.  Div.  589,  593,  596,  affirmed  158 

N.  Y.  688 16,  241 

Greason  v.  Keteltas,  17  N.  Y.  491 239 

Green  v.  Price,  13  M.  &  W.  695 149 

Greer  v.  Poole,  L.  R.  5  Q.  B.  Div.  272 16 

Grier  v.  Bilger,  13  Pa.  58  (1850) 15 

Gumm  V.  Hallett,  L.  R.  14  Eq.  555 197 

Haggart  v.  Morgan,  5  N.  Y.  (1  Seld.)  422 237 

Halfhide  v.  Fenning,  2  Brown's  Chancei-y  Cases  336  (1788), 

156,  157,  162,  163,  166,  169,  170,  172,  175,  197, 

205,   206,   207,   208,   222,   227,   233,   239,  266 

Hall  V.  People's  Ins.  Co.,  6  Gray  185 277 

Hamilton  v.  Ins.  Co.,  136  U.  S.  242 70 

Hamlyn  &  Co.  v.  Talisker  Distillery,  21  Sess.  Cases  (4th 
Series)  21,  L.  R.  (1894  )A.  C.  202 

208,  217,  223,  228,  232,  239,  245,  249,  263,  267-271 
Harcourt     v.  Ramsbottom,   1   Jac.  &      Walk.     505,    511 

158,  167,  168,  172,  174,  190,  197,  205,  206,  222, 

227,  239,  245,  248 

Harris  v.  Reynolds,  7  Q.  B.  71 222 

Harrison  v.  Wright,  13  East  343 149 

Hawkins  v.  Colclough,  1  Burrow  275 129 

Hepburn  v.  Griswold,  8  Wall.  003 42 

Hertz  V.  Woodman,  218  U.  S.  205 42 

Hickman  v.  Sawyer,  216  Fed.  Rep.  289 18 

Hide  V.  Petit,  Freeman's  Ch.  Rep.  133;  1  Ch.  Cas.  185,  1670; 

Nelson's  Ch.  Rep.  83,  1673 132-134,  168,  183,  206,  227 


TABLE  OF  CASES  323 

PAGKB 

Homer  v.  Flintoff,  9  M.  &  W.  678 149 

Horton   v.   Sayer,   4   Hurlstone  &   Norman,   642,   643 

182,  185-187,  194,  201,  227,  228,  239,  277 

Hoste  V.  Dalton,  137  Mich.  522 16 

Insurance  Co.  v.  Morse,  20  Wall.  445,  22  L.   Ed.  365 

244,  249,  250 
Isaacs  V.  Third  Avenue  Railroad  Co.,  47  N.  Y.  122  (1871) ; 

7  Am.  Rep.  418 48 

Jackson  v.  Barry  Railway,  L.  R.  [1893]  1  Ch.  D.  238  (The 

Justice  of  the  Peace,  Lond.  Je.  24,  1911,  Vol.  75,  P. 

291)   216,  261 

Johnson  v.  Machielson,  3  Camp.  44  (1811) 276 

Jones  V. ,  1  Rolle  380 143 

Joplin  V.  Postlethwaite,  61  L.  T.  R.  629 215 

Judson  V.  Gray,  11  N.  Y.  408 47 

Kemble  v.  Farren,  6  Bing.  141 149 

Ketchum  v.  Belding,  58  App.  Div.  295 17 

Kharas  v.  Collier,  Inc.,  171  App.  Div.  388 45 

Kill  V.  Hollister,  18  Geo.  II 1746,  1  Wils.  129 153-154,  156, 

160,  170,  183,  190,  206,  226,  227,  239,  251,  262,  266 

King  V.  Joseph  (1814),  5  Taunt.  452 84,  157,  158,  167,  168 

183,  188,  206,  226,  227,  252 
Kirchner  &  Co.  v.  Gruban,  99  L.  T.  Rep.  932;  L.  R.  [1909] 

1  Ch.  413 221 

Klein  v.  Maravelas,  219  N.  Y.  383 43 

Knox  V.  Lee,  12  Wall.  457,  reversing  Hepburn  v.  Griswold, 

8  Wall.  603 42 

La  Greve  v.  ^tna  Live  Stock  Ins.  Co.,  81  Hun  28 17 

Law  V.  Garrett,  38  L.  T.  Rep.  3;  8  Ch.  Div.  26 217,  220 

Le  Breton  v.  Miles,  8  Paige  261 16,  241 

Leavitt  &  Lee  v.  Morrow,  6  Ohio  St.  71 50 

Lee  V.  Page,  Law  Journal,  n.  s.  vol.  30,  Pt,  1 188,  227 

Lickbarrow  v.  Mason,  2  T.  R.  63,  1  Smith's  L.  C,  11th 

ed.,  693 71,  72 

Logan  V.  Bank  of  Scotland,  94  L.  T.  Rep.  153;  (1906)  1 

K.  B.  141 221 

Logan  V.  United  States,  144  U.  S.  263-301,  36  L.  ed.  429- 

442,  12  Sup.  Ct.  Rep.  617 46 


324  TABLE  OF  CASES 

PAGES 

London  Tramways  Co.  v.  Bailey,  L.  R.  3  Q.  B.  D.  217. .  .201,  227 
Lord  Lonsdale  v.  Littledale,  2  Vesey,  Jr.  451,  452  (1794). 

Per  L.  Ch.  Loughboroaigh 95 

Love-day,  in  re.    Y.  B.  21  Ed.  Ill,  7-20 68 

Lowe  V.  Peers,  4  Burr.  2225 ;  1  Saund.  58c 149 

Luke  V.  Lyde,  2  Burr.  883 73,  74 

McAllister  v.  Smith,  17  111.  328,  334 16,  241 

McCaul  V.  Monkland  Railway  Co.,  9  Sessions  Cases,  1st 

Series,  522   38 

Mackenzie   v.   Girvan,   3    Sessions    Cases,   2nd   Ser.,   318; 

2  Bell's  App.  43 76,  166,  178 

M'Lean  v.  Clydesdale  Bank,  L.  R.  9  Appeal  Cas.  95 73 

Manchester  Ship  Canal  Co.  v.  S.  Pearson  &  Son,  Limited, 

Per  Contra,  Q.  B.  Div.  C.  A.,  L.  R.  Q.  B,  D.  1900, 

Vol.  II,  at  606 197,  245 

Masterson  v.  Masterson,  22  Ky.  L.  Rep.  1193,  60  S.  W. 

301    70 

Mayor  of  New  York  v.  Hamilton  Fire  Ins.  Co.,  39  N.  Y.  45      17 
Meacham  v.  Jamestown,  F.  &  C.  R.  R.  Co.  (1914),  211  N.  Y. 

346  243,  277 

Meeker  v.  Wright,  76  N.  Y.  262  (1879) 48 

Message  Photoplay  Co.  v.  Bell,  100  Misc.  267,  167  N.  Y. 

Supp.  129 125 

Miles  V.  Schmidt,  168  Mass.  339 273 

Mill,  in  the  matter  of.    Y.  B.  11  Hen.  IV.,  33 64 

Mills  V.  Bayley,  2  H.  &  C.  36,  41 16,  187,  190, 

192,  202,  227,  228,  247 

Mills  V.  Lee,  6  Monr.  91 15 

Milne  v.  Gratrix  (1806),  7  East.  608,  611 84,  126,  157,  158, 

167,  168,  183,  188,  206,  226,  227,  252 
Mitchell  V.  Harris   (1793),  2  Vesey  Jr.'s  Reports  129 

153,  155,  157,  160,  166,  169,  222,  226,  227,  237,  239,  251 
Mittenthal  v.  Mascagni,  183  Mass.  19,  66  N.  E.  425,  60 

L.  R.  A.  812,  97  Am.  St.  Rep.  404 17,  246,  272-274 

Moffat  V.  Cornelius,  26  Weekly  Reporter  1914 200,  227 

Monongahela  Navigation  Co.  v.  Fenon  (1842),  4  Watts  & 

Sergeant  205 15 

Moore  v.  Fitzwater,  2  Rand  (Va.)  442 15 


TABLE  OF  CASES  325 

PAGES 

Morris  v.  Creaeh,  22  Car.  II,  B.  R.  (1671),  1  Levinz's  Rep. 

292    101 

Morse  v.  Goold,  11  N.  Y.  281 47 

Motion  Picture  Patents  Co.  v.  Universal  Film  Mfg.  Co., 

243  U.  S.  502 42 

Mounteagle  v.  Penruddock,   Godbolt's  Reports   (1613),  p. 

185,  Y.  B.  20  H.  6.  18  (1442) 98,  99,  100 

Muldrow  V.  Norris,  contra,  2  Cal.  74 16 

N.  Y.,  L.  &  W.  R.  R.  Co.,  Matter  of,  98  N.  Y.  447 17 

Newgate  v.  Degelder,  18  Car.  II,  1  Sid.  281,  2  Keble's  Re- 
ports, 10,  20,  24 114 

Noble  V.  Harris,  3  Keble's  Reports  745,  29  Car.  II  B.  R. 

1688 V 145-146 

Northampton  Gas-Light  Co.  v.  Parnell,  15  C.  B.  630,  645, 

80  E.  C.  L.  630, 139  English  Reprint  572. . .  .16, 180,  227,  247 

Northern  Liberty  Market  Co.  v.  Kelley,  113  U.  S.  199 70 

Norton  v.  Mascall,  36  Car.  2;  Repts.  of  Cases  in  Ch.  Vol. 

II,  p.  304  (1694) 134-135,  137,  205,  206,  274 

Nute  V.  Hamilton  Mut.  Ins.  Co.,  6  Gray  174 14,  277 

0.  &  L.  C.  R.  R.  Co..  V.  V.  &  C.  R.  R.  Co.,  63  N.  Y.  176. . .       16 

The  Oranmore,  24  Fed.  Rep.  922 241 

Oregon,  etc.,  Bank  v.  Amer.,  etc.,  Co.  (C.  C),  35  Fed.  22. .     244 

Pacific  Insurance  Co.  v.  Soule,  7  Wall.  433 42 

Pakas  V.  U.  S.    See  Rosen  v.  U.  S. 

Palmer  v.  Lavers,  105  N.  E.  1000  (Mass.  Supreme  Jud.  Ct. 

1914)    16 

Pearson  &  Son,  Ltd.,  v.  Dublin  Corp.,  L.  R.  [1907]  A.  C. 

351    322 

Penn  v.  Lord  Baltimore,  1  Ves.  Sen.  444 14 

People  V.  Charles  Schweinler  Press,  214  N.  Y.  395 43,  278 

People  V.  Stephens,  52  N.  Y.  306 16 

People  V.  Williams,  189  N.  Y.  131 43 

Perkins  v.  U.  S.,  etc.,  Co.  (C.  C),  16  Fed.  513 244 

Philadelphia,  etc.,  Co.  v.  Davis,  etc.,  Co.,  77  Fed.  879 70 

Phillip  V.  Phillip,  160  N.  Y.  Supp.  624,  96  Misc.  471 94 

Pierce  v.  Somerset  Railway,  171  U.  S.  641 68 

Pierey  v.  Young,  L.  R.  14  Ch.  D.  200 202,  227 

Pierson  v.  McCahiU,  21  Cal.  122 15 


326  TABLE  OF  CASES 

PAGES 

Pillans  V.  Van  Mierop,  3  Burrow,  1663,  1669 66,  80 

Pinnell,  ease  of.    5  Rep.  117a;  Co.  Litt.  212b.    See  Foakes 

V.  Beer,  9  App.  Cas.  605 137 

Pollock  V.  Farmers'  Loau  &  Trust  Co.,  157  U.  S.  429,  revers- 
ing Springer  v.  United  States,  102  U.  S.  586,  and  Pa- 
cific Insurance    Co.  v.  Soule,  7  Wall.  433 42 

Pope  V.  Lord  Duncannon,  9  Sim.  177 168,  248 

President,  etc.,  of  Delaware  &  Hudson  Canal  Co.    See  Dela- 
ware &  Hudson  Canal  Co. 
Price  V.  Williams,  3  Bro.  C.  C.  163;  1  Vesey  Jr.  365. . .  .162,  207 
Printing  and  Numerical  Registering  Co.  v.  Sampson,  L.  R. 

19   Eq.  462 17 

Randell  v.  Thompson,  L.  R.  1  Q.  B.  D.  748. . .  .192,  197,  201,  227 

Rastetter  v.  Hoenninger,  214  N.  Y.  66 94 

Reed  v.  Washington  Fire  &  Marine  Ins.  Co.   (1885),  138 

Mass.    572 277 

Reiehard  v.  Manhattan  Ins.   Co.,  31  Mo.  518,  521 276 

Renshaw  v.  Queen  Anne  Mansions  Co.,  L.  R.  (1897)  1  Q. 

B.  D.  662 199,  214,  228 

Rex  V.  Wheeler,  3  Buit.  1257 143-144 

Rice  V.  Bixler,  1  W.  &  S.  456 14 

Riddlesbarger  v.  Hartford  Ins.  Co.,  7  Wall.  386  (Collect- 
ing authorities) 18 

Riggs  V.  C.  M.  Ins.  Co.,  125  N.  Y.  7  (25  N.  E.  1058,  101 

R.  A.  684,  21  Am.  St.  Rep.  716) 16 

Ripley  v.  Minsi  Ins.  Co.,  30  N.  Y.  136,  163 17 

Ripley  v.  Great  Northern  Railway  Co.,  31  L.  T.  R.  869.  .201,  227 

Roach  V.  N.  Y.  &  Erie  Co.,  30  N.  Y.  546 17 

Rogers  v    Playford,  12  Pa.  181 16 

Roper  V.  Lendon,  1  El.  &  El.  825 239,  277 

Rosen  v.  United  States,  Pakas  v.  United  States  (U.  S.  Su- 
preme Court  Advance  Opinions,  Feb.  1,  1918,  No.  5) . .       45 
Rouse  &  Meier,  in  re,  L.  R.  6  C.  P.  212. . .  .191,  192,  197,  202,  227 

Rowley  v.  Young,  3  Day  118 154 

Rudston  &  Yates  (Mich.  17  Car.  in  the  King's  Bench.) 55 

Rumsey  v.  N.  Y.  &  N.  E.  R.  R.  Co.,  133  N.  Y.  79  (1892) . .       47 

Russell  V.  Pellegrini,  ElUs  &  Blackburn  1020 181,  182, 

183,  227 


TABLE  OF  CASES  327 

PAGES 

Russell  V.  Russell,  L.  R.  14  Ch.  D.  471,  28  W.  R.  Dig.  154. .     215 

Sainter  v.  Ferguson,  7  M.,  G.  &  S.  716 150 

Sanford  v.  Accident  Assoc,  147  N.  Y.  326 240 

Sanford  v.  Commercial  Traveler's  Assoc,  86  Hun  380;  147 

N.  Y.  326 238 

Scott  V.  Avery   (1855-56),  5  H.  L.   Cas.  811;   25  L.  J. 

(Exch.)  308;  8  Exch.  Rep.  487 69,  170,  171,  175,  176, 

178,  180,  182,  185,  186,  187,  188,  189,  190, 
193,  194,  195,  201,  203,  204,  205,  206,  207, 
208,  210,  212,  214,  217,  218,  219,  226,  227, 
228,  229,  230,  239,  243,  250,  252,  253-254, 
264,  265,  266,  267 
Scott  V.  Mercantile  Accident  &  Guarantee  Ins.  Co.,  66  L.  T. 

R.  811 195,  199,  213,  219,  228,  239 

Scott  V.  San  Sandeau,  I.  Q.  B.  109a,  I  Adolphus  &  Ellis 

Reports  (N.  S.)  456,  3  Bl.  Com.,  p.  17,  note  14 37 

SeUgman  v.  Le  Boutillier,  L.  R.  1  C.  P.  681 183,  227 

Shiell  V.  M'Nitt,  9  Paige  101 149 

Slater  v.  May,  2  Ld.  Raymond  1072 121 

Smith  V.  Compton,  20  Barb.  262 236 

Smiih  &  Service  (1890),  L.  R.  25  Q.  B.  D.  545. . .  .196,  222,  227 

Snodgrass  v.  Gavit,  28  Pa.  221  (1857) 15 

Southcote,  in  re  case  of,  4  Rep.  83b 137 

Spackman  v.  Plumstead  Board  of  Works,  L.  R.  10  App. 

Cas.  229   203,  227 

Springer  v.  United  States,  102  U.  S.  586 42 

Spurrier  et  al.  v.  La  Cloche,  71  L.  J.  (P.  C.)  101;  L.  R. 

[1902]  A.  C.  446;  86  L.  T.  H.  631;  51  W.  R.  1;  18  T. 

L.  R.  606 217,  228 

Stapilton  v.  Stapilton,  1  Atk.  3 14 

State  V.  Bohan,  15  Kansas  407 49 

The  Steam-Boat  Thomas  Jefferson,  10  Wheaton  428  (1825)  43 
Stewart  v.  Brooklyn  and  Crosstown  Railroad  Co.,  90  N.  Y. 

588  (1882)  48 

Stoddard  v.  Mix,  14  Conn.  12 14 

Stone  V.  Marsh,  6  Barnewall  and  Cresswell  551 41 

Street  v.  Rigby,  6  Vesey  Jr.  814 159,  162,  163,  164,  165, 

166,  169,  170,  239,  250,  251 


328  TABLE  OF  CASES 

PAQES 

Tailor,  in  re.,  Six  Carpenters'  Case,  8  Rep.  147a 66 

Taylor   v.   Marling,   2   Manning  &  Granger's   Reports  55 

(1840)    96 

Taylor  v.   Patrick,  1  Bibb.  168    14 

Theft,  in  the  matter  of.  Y.  B.  13  Edw.  4,  p.  9 79 

Thomas  v.  Sorrell  (1673),  Freeman's  Reports  85 131 

Thompson  v.  Chamock,  8  T.  R.  139 166,  169,  170,  190,  222, 

226,  227,  233,  234,  239,  243,  245,  250,  262 

Thomson  v.  Anderson,  L.  R.  9  Eq.  523 190,  197,  227 

Thurston  v.  Fritz,  91  Kansas,  468 49 

Tllford  V.  French,  1  Keb.  635,  599,  15  Car.  II  in  B.  R. 

(1664),  1  Levinz.  113 100-102 

Tobey  v.  The  County  of  Bristol  et  al.,  3  Story  800,  821,  Fed. 

Cas.  no.  14065 14,  244,  251 

Toledo  S.  S.  Co.  v.  Zenith  Transportation  Co.,  184  Fed. 

Rep.  391,  396 93,  159,  247,  248 

Townsend  v.  Masterson,  15  N.  Y.  587u 16 

Trainor  v.  Phoenix  Fire  Assurance  Co.,  65  L.  T.  R.  825 

174,  194,  210,  214,  219,  228,  239 

Tredwen  v.  Holman,  1  Hurlstone  &  Coltman  72 186,  188,  192, 

193,  194,  219,  227,  228 

Trippet  V.  Eyre  (1689),  2  Ventris  113  130-131 

Trombley  &  Carrier  Co.  v.  Seligman,  133  App.  Div.  525. ...       45 
Union  Insurance  Co.  v.  Central  Trust  Co.,  157  N.  Y.  633. .       84 

Union  National  Bank  v.  Chapman,  169  N.  Y.  538,  545 16,  241 

United  States  v.  Reid,  12  How.  361,  13  L.  ed.  1023 46 

U.  S.  Asphalt  Refining  Co.  v.  Trinidad  Lake  Petroleum  Co., 

222  Fed.  Rep.  1006 242 

Universal  Film  Manufacturing  Co.  v.  Bell.    100  Misc.  281, 

167  N.  Y.  Supp.  124 125 

Vawdrey  v.  Simpson  (1895),  per  Chitty,  J.,  65  L.  J.  (Ch.) 

369;  L.  R.  [1896]  1  Ch.;  44  W.  R.  123 215 

Vere  v.  Cawdor,  11  East's  Reports  568 42 

Viney  v.  Bignold,  L.  R.  20  Q.  B.  D.  172 204,  227 

Vivion  V.  Wilde.     See  Vynior's  Case. 

Vynior's  Case.     Y.  B.  at  7  Jac.  1,  rot.  2629.     Brownlow 

and  Goldesborough's  Reports   (2nd  ed.  1654),  Coke's 

Reports,  Part  VIII,  at  p.  80 84-102.  105,  106,  107,  113, 


TABLE  OF  CASES  329 

PAGES 

115,  129,  131,  132,  167,  170,  183,  188,  191,  192, 
196,  205,  223,  226,  227,  234,  243,  247,  252,  266 

Walmsley  v.  White,  40  W.  R.  675  (1892) 215 

Warbrooke  v.  Griffen,  2  Browul.  254;  Moore  876,  877,  S.  C.      66 

Warburton  v.  StoiT,  Barnewall  v.  Cresswell's  Repoiis,  103 . .       90 

Waters  v.  Taylor,  15  Ves.  Jr.  10. . .  .158,  159,  160,  161,  165,  166, 

169,  170,  172,  174,  175,  197,  205,  206,  207, 

222,  227,  230,  239,  244,  250,  265,  274 

Watson  V.  Wetter,  91  Pa.  385 16 

Wellington  v.  Mackintosh,  2  Atk.  569  (1743) ...  .154,  156,  157, 

160,  169,  170,  227 

Whitfield  V.  Levy,  35  N.  J.  Law  Reports  149 148 

Wickham  v.  Harding,  28  L.  J.  (Exch.)  215 182,  183,  227 

Wilde  V.  Vinor.     See  Vynior's  Case. 

Wilkinson  v.  First  National  Fire  Ins.  Co.,  72  N.  Y.  499 17 

Williams  v.  Fire  Association  of  Philadelphia,  119  App. 

Div.  573 18 

Wills  V.  Maccarmick,  2  Wilson,  148,  149 95 

Wilson  V.  Glasgow  Tramway  Co.   (Je,  22,  1878),  5  Sess. 

Cases  (4th  Ser.)  981 262 

Winter  v.  Trimmer,  1  Wm.  Black,  395 149 

Wiseman  v.  Roper,  1  Chanc.  158 14 

Wood  V.  Lafayette,  46  N.  Y.  484 236 

Wright  V.  Hart,  182  N.  Y.  330 43 

Yeomans  v.  Bell,  151  N.  Y.  230;  45  N.  E.  552 69 

Zane  v.  Zane,  6  Munf.  406 14 

Zenith  case.    See  Toledo  S.  S.  Co. 


INDEX 


(References  to  books  ■will  be 
found  indexed  under  Bibliog- 
raphy. References  to  cases  and 
statutes  will  be  found  indexed 
under  Tables  of  Cases  and  Stat- 
utes.) 

Abbot,  Everett  V.,  39 
Action  is  to  be  upon  the  award, 
232,  265 
See  also  Arbitrators  must  de- 
cide before  an  appeal  may 
be  made. 
Action  on  revoked  covenant,  113- 

115,  154 
Agency,  nature  of,  not  clearly  un- 
derstood in  early  develop- 
ment  of   English   common 
law,  68-69 
Agreement  to   arbitrate   no   hin- 
drance  to    litigation,   155- 
157,  173-177,  185,  189,  217, 
221,  231,  232 
.    See     also     Ousting     court     of 

jurisdiction. 
Agreements,     containing     clause 
"In  the  usual  way,"  ex- 
plained, 271 
Agreements    given    effect    under 
certain      qualifications, 
232 
Agreements    must    be    enforced, 
165-169,  183 
See  also  Eevocability. 
Allen,  Judge,  13,  185,  227-237 


American   courts  ousted  by  for- 
eign courts,  272-278 
American  law,  judicial  errors  in, 

226-240 
Appeals  from  agreements  justifi- 
able, 163-165 
Arbitration,  cause  of,  18 

See    also    Commercial    arbitra- 
tion, 
considered         unconstitutional, 

240 
contrary  to  public  policy  under 

old  rule  of  law,  233 
development  of  as  part  of  the 
English  Common  Law,  106- 
107 
disputes   which    may   be    arbi- 
trated, N.  Y.  S.,  286 
expert  opinions  gained  by,   8, 

26,  156 
forms  of,  11,  286 
history  of,  24-38,  105 
ancient,  25 
Austria-Hungary,  31 
Belgium,  37 
China,  37 
Denmark,  28 
Edinburgh,  30 
France,  27,  30,  32,  33 
Germany,  37 
Greece,  24,  36 
Hebrew  state,  29 
HoUand,  31 
India,  State  of  Nepal,  36 


331 


332 


INDEX 


Arbitration,  history  of,   Ireland, 
30 
Italy,  30,  37 
Japan,  35 
Netherlands,  37 
Norway,  37 
Persia,  35 
Portugal,  37 
Eome,  27,  29 
Scotland,  28,  37,  58 
Spain,  30,  33,  37 
Sweden,  37 
informal,  286 
international,  3 

a    means    of    ascertaining    tlie 
cause  of  action  to  be  de- 
cided by  the  courts,   174- 
175,  184-186 
parties  eligible  to  arbitrate  in 

N.  Y.  S.,  286 
the  present  is  the  age  of,  34 
present  methods  irregular,  18 
a  preventive  of  litigation,  7 
revocation  of  references,  16 
the  right  of  liberty  in  France, 

34 
satisfaction  afforded  by,  35,  38 
satisfaction  of,  in  England,  267 
a  social  function,  18,  19 
under  auspices  of  the  N.  Y.  S. 

bodies,  287 
under  auspices  of  the  N.  Y.  S. 

Bar  Association,  287 

under  the  code  of  N.  Y.  S.,  287 

versus  Judicial    disposition   of 

commercial   controversy,    8 

versus  Judicial  procedure,  19 

Arbitration    agreement    adopted 

by     the     Public     Service 

Commission    for    the    first 

district   of  N.   Y.  S.  with 

the     Interborough     Rapid 


Transit  Co.  of  N.  Y.,  form 
of,  298-300 

arbitrators,  appointment  of, 
fees,  etc.,  299-300 

bearing  by  arbitrators,  299- 
300 

litigation,  times  when  it  is  le- 
gitimate, 300 

manner  of  conducting  arbitra- 
tion under,  299-300 

submissions,  conditions  of  un- 
der, 298 
Arbitration  clause  essential  to  a 

contract,  183 
Arbitration     clauses     explained, 

266 
Arbitrators  are  not  agents,  57-58, 
95 

as  agents.  See  Arbitrators, 
definition  of. 

authority  of,  countermandable, 
53-59 

Boards  of.   Chamber  of   Com- 
merce of  N.  Y.,  6 
Court  of  sessions,   England, 

8 
Grecian,  36 
Holland,  31 
New  Amsterdam,  5,  6 

decisions  of,  final  and  binding, 
181-183,  192 

definition  of,  55 
Judge  Andrew's,  234 

jurisdiction  of  not  to  be  ousted 
by  courts,  216 

lawyers  as,  desirability  of,  10, 
11 

must  determine  before  parties 
resort  to  courts,  174-176, 
182,  193,  203-204,  207- 
214,  219,  229,  232-233 

official  list  of,  10 


INDEX 


333 


Arbitratora,  power  of,  55 

in  re,  to  partnership,  2]  5 
Artificial  reasoning  of  judiciary, 

56-57 
Ashbourne,  Lord,  270 
Ashton,     Justice,     54,     123-124, 

143 
Assumpsit,    development   of,   63- 

65 
Authority,   doctrine   of,   applica- 
tion   and    revocability    of, 
129-134 
Awards,  early  English  opinions  as 
to  whether  awards  are  of 
as    high    legal    nature    as 
an  obligation,  101 
enforcement  of,  134-135,  183 
See  also  Agreements  must  be 
enforced, 
final  and  binding,  222,  234 

meaning  of  explained,  155 
liberally  construed,   129 

Bacon,  Matthew,  279 

Baldasseroni,  7 

Eartley,  Ch,  J,,  50 

Bentwitch,  30 

Bible  advises  to   settle  disputes 
peacefully,  280 

Bills  of  lading  submitted  to  ar- 
bitration, 220-221 

Bonds,  Coke  v.  Abbott's  opinion 
aa  to  the  form  of,  90- 
91 
under  seal,  enforcement  of  was 
a  fixed  concept  of  the  com- 
mon law  at  an  early  pe- 
riod, 87-90 

Bowen,  Lord  Justice,  40,  216 

Bridgman,  Lord  Chancellor,  132 

Businesa    men,    attitude    toward 
the  law,  1,  2 


Businesa  men,  wish  only  to  estab- 
lish cause  of  action  by  ar- 
bitration, 265-266 
wish  to  keep  out  of  courts  a 
legitimate  desire,  279 

Campbell,    Lord,     176-178,    181, 

182,    186,    205,    253,    259, 

264 
Cardozo,  Judge,  43,  277,  278 
Carta  Mercatoria,  3 
Chamber  of  Commerce,  N,  Y.  S., 

accomplishing      a      public 

good     by     prevention     of 

litigation,  260-261 
See  also  Submissions, 
arbitration,       committee       on, 

9 
arbitrator  of,  6 
cooperation   with    the    Bar   of 

N.  Y.  S,,  280 
satisfaction    afforded   businesa 

men,  9 
Chancellors,  early  English,  salary 

and  fees  of,  255-259 
Charters.     See  Individual  names 

of  charters. 
Chicago.      See    Trade    organiza- 
tions; Municipal  Court  of 

Chicago 
Clarke,  Samuel  B.,  49 
Coke,  3,  85,  91,  99,  131,  132,  136- 

140,  141-145 
Coke's   dictum,    difficult   to    des- 

troy,  184 
Coleridge,  Lord,  37,  173-175,  194, 

195,  197,  210,  212 
Commerce  of  middle  ages  carried 

on  at  fairs,  76 
Commercial  arbitration,  effect  of 

war  upon  English  practice 

of,  22 


334 


INDEX 


Commercial    arbitration,    English 
practice  of,  cause,  19-20 
growth  of,  19,  22 
result  of,  21-23 

Commercial  contracts  with  the 
clause  "in  the  usual  man- 
ner, ' '  are  treated  accord- 
ing to  "the  habitual  form 
of  arbitration  adopted  in 
fact,"  223-225 

Common   law,    arrested    develop- 
ment   of,    62  65,    146-147, 
223,  224 
See  also  Arbitration,  develop- 
ment of. 
many    principles    peculiar    to, 

are  obsolete,  70 
of     England     on     arbitration 
changed     by     courts,    not 
parliament,  245-246 

Common  law  courts  arresting  the 
development  of  common 
law  cause  turning  point  in 
history  of  English  law,  62- 
63 
determined  to  drive  mercan- 
tile courts  out  of  business, 
81,  82 
opposition  to  court  of  Admir- 
alty, 82-83 

"Condition  precedent."  See  Ar- 
bitrators must  make 
awards  before  an  appeal 
may  be  made. 

Confucius  believed  in  peaceful 
settlements  of  disputes, 
280 

Consideration,  doctrine  of,  forced 
on  merchants  by  courts  of 
common  law,  80 

Contracts,  arbitration  clause  in- 
troduced into,  23 


Contracts,  aversion  of  courts  to 
sanction,  13,  15 

courts  to  be  selected  by  par- 
ties to,  in  event  of  con- 
troversy, 17 

development  of  in  the  common 
law,  65 

engineer  or  architect  to  be  final 
judge,  23 

English,  22 

executory,  not  under  seal,  are 
enforceable,  64 

freedom  to  make,  17 

history  of  the  development  un- 
der English  law,  60-70 

laws  governing,  may  be  stipu- 
lated by  parties  to,  16 
Court  procedure,  administration 
of  ought  to  be  within  the 
understanding  of  laymen, 
2 

See  also  Arbitrators,  boards 
of;  Litigation;  Municipal 
court. 
Courts,  arbitration  encouraged 
by,  to  prevent  litigation, 
234,  262 

attitude  toward  arbitration,  18, 
144-145,  159-163,  168-169, 
198-202,  250-252,  262 

See  also  New  York  Courts  at- 
titude. 

power  to  decree  specific  per- 
formance of  an  agreement, 
196 

privileged  to  aid  arbitrators  by 
removing  difficulties,  222 

revocation    considered    a    just 
cause  for  action,  153 
Cranworth,  Lord  Chancellor,  175, 
180,    182,    184,    190,    205, 
211,  220 


INDEX 


335 


CressweU,  Justice,  171-172 
Cullen,  Judge,  238 
Custom  of  Avignon,  3 

Damages,  fizing  of,  as  a  penalty, 
148-149 

Davis,  Judge  Vernon  M.,  260 

Debt,  want  of  consideration  orig- 
inated with,  66 

Defendant  upon  an  award  should 
be  notified  of  award  by 
arbitrator,  115 

Denman,  C.  J.,  37 

Difficulties  of  safeguarding 
clients  against  ineffective 
agreements  in  case  of 
breach,  150-152 

Discoveries,  courts  relieve  upon  a 
bill  for,  154-155 

Dodridge,  J.,  143 

Earl,  Judge  Robert,  17,  48 

Eldon,  Lord,  159-165,  167-169, 
171,  207,  265,  266,  274 

EUenborough,  Lord,  42,  67,  126, 
275,  278 

English  Arbitration  Committee, 
growth  and  success  of,  20- 
23 

English  common  law  reports,  ef- 
fect of,  upon  arbitration, 
231 

English  courts  ousted  of  jurisdic- 
tion by  courts  of  Hungary 
or  Germany,  218,  267 

English  law,  confused  state  of, 
207 

Equity,  cost  of,  versus  cost  of 
arbitration,  29 

Errors   cause    other   errors,   238- 
239,  246 
See  also  Judicial  errors. 


Esher,  Lord,  194,  195,  196,  197, 
214 

Fancher,  Enoch  L.,  6 

Fees,  loss  of,  real  cause  of  early 
English  opposition  to  ar- 
bitration,  253-255 

Fines  and  penalties,  passing  of, 
148-152 

Gild  merchant,  4 

Gild  of  St.  John  of  Beverly,  4 

Gilds,  city  of  London,  5 

city  of  York,  4 
Grier,  J.,  15 

Hamburg  court,  220 
Hardwicke,  Lord,  154,  157,  160 
Harley,  Herbert,  18 
Herschell,  Lord  Chancellor,  209, 

270 
Hollister,  Judge,  247-248 
Holmes,  Justice,  41,  276 
Holt,  Lord,  138-139 
Horwood,  118 
Hough,  Judge,  16,  52,  242-249 

Illinois  law  of  arbitration,  294- 
298 

arbitrators,    compensation    of, 
297 
number  of,  etc.,  295 
power  of,  295-296 

awards,    nature    and    enforce- 
ment of,  296 

definition  of  terms,  298 

hearings  of  controversies,  rules 
for,  etc.,  295 

jurisdiction    of   the   court   un- 
der, 296-297 

parties  eligible  to  arbitrate  un- 
der, 294 


336 


INDEX 


Illinois  law  of  arbitration,  repeal 
of  the  act  of  1873,  298 
revocability  of,  295,  297 
subjects    that    may    be    arbi- 
trated under,  294 
witnesses,  fees,  etc.,  295 
■writs    of    error    and    appeals 
from    decision    of    court, 
297 
Implied    quantum    meruit.      See 

Promise  implied. 
Intention  of  parties  to  an  agree- 
ment   decides    system    of 
law    which     shall     govern 
their  contract,  267-273 
See  also  System  of  the  law. 
governs  decision  as  to  validity 

of  arbitration,  241 
governs    decisions    upon    con- 
tracts, 232,  267-273 

Jeffreys,    Lord    Chancellor    and 

Baron,  135,  137,  213,  274 

Jessel,    Sir     George,     138,     201, 

202 
Judges'  motive  in  preventing  ar- 
bitration     from      ousting 
jurisdiction   of   the   court, 
231 
Judicial  error,  184,  213,  221 
judicial  method  is  wisest  way 

to  correct,  40 
leaves  its  impress,  184 
Jurisdiction  of  courts,  re  arbitra- 
tion, 208-209 
defined,  273-274,  278 
Justice,   administration    of,   pre- 
limin"  y    report     on     eflB- 
ciency  in,  250 
arbitration  is  satisfactory  proc- 
ess of  administering,  31-32 
See  also  Speedy  justice. 


Kenyon,  Lord,  162,  164-166,  169, 

171,  233 
Kinnear,  Lord,  271 
Knowlton,  C.  J.,  272,  278 

Lauer,  Judge,  6 
Law,  uncertainty  in,  39 
Law  merchant  a  branch  of  the 
Law  of  Nations,  72-73,  79 
development  of,  73 
outgrowth  of  the   market  law 
founded  by  merchants,  75 
Law   of  admiralty,   development 

of,  76 
Law    of    nations  identified   with 

law  of  nature,  79 
Limitations,  statutes  of,  made  by 

contractors,  17 
Limitations  of  subjects  of  which 
courts    have    jurisdiction, 
273 
Limitations  of  time  within  which 
suits  may  be  brought  ad- 
justed by  contract,  273 
Litigation,  fear  of,  the  cause  of 
arbitration,  18 
See  also  Prevention  of  unnec- 
essary litigation, 
modern  courts  do  not  encour- 
age, 260 
prevention      of,      favored     by 
"Public  Policy,"  14 
London     Court     of     Arbitration, 
protest  of,  to  N.  Y.  Cham- 
ber    of     Commerce     upon 
Judge    Hough 's    decision, 
242 
Loughborougn,   Lord   Chancellor, 

154 
Lurton,  Justice,  42 

Macdonell,  Sir  John,  22 
Macklin,  Charles,  39 


INDEX 


337 


Mansfield,  Lord,  71-75,  129,  137, 

143,  154 
Market  courts,  origin  and  devel- 
opment of,  76-78 
Martin,  Baron,  16,  186,  190,  194 
Massachusetts  courts,  attitude  to- 
ward arbitration,  276 
Maule,  J.,  16,  57 
Montague,  Sir  Henry,  102,  142, 

143,  154,  155,  213 
Moulton,  Fletcher,  151 
Municipal     Court     of     Chicago, 
rules     governing     arbitra- 
tions, 301-302 
jurisdiction,  301 
law  of  1917,  301-302 
submission       to       arbitration, 
forms  of,  302-303 
Municipal  Court  of  New  York, 
arbitration    and    concilia- 
tion branch  of,  6,  7 
arbitration,  rules  for,  now  in 

operation  in,  306-309 
arbitrators,  duties  of,  307 
awards,  307 
establishment  of,  306 
fees,  307 

forms  of  arbitration,  307-309 
parties  eligible  to  submit,  306 
record  of  proceedings,  307 
fevocability  of  the  submission, 

307 
submissions,  conditions  to,  306 
Mutual   promises.     See   Promise 
implied. 

New  York  City.  See  Arbitrators, 
boards  of ;  Municipal 
Court  of. 

New  York  courts,  attitude  to- 
ward arbitration,  12,  230- 
235 


New  York  State.  See  Chamber 
of  Commerce,  N.  Y,  S. 

"Ousting  courts  of  jurisdiction," 
206-207,  210,  244,  250 

See  also  Agreement  to  arbi- 
trate no  hindrance  to  liti- 
gation ;  Appeals  from 
agreements. 

American  explanation  of,  231- 
233 

not  possible  through  arbitra- 
tion, 172,  175,  176,  194, 
211,  262-264 

origin  of  the  phrase,  153,  243 
Ouzel  Galley  Arbitration  Society, 
30 

Page,  Judge,  45 

Park,  J.,  127 

Parker,  Judge,  17 

Parol  contracts,  development  of 
law  of,  68 

Parol  submissions  insecure 
method  of  arbitration  un- 
der the  early  English  law, 
98-100,  107-109 

Pendency  of  arbitration  bar  to 
action,  113,  153 

Piepoudre  Court.  See  Market 
courts. 

Pike,  118 

Pole,  143 

Prevention  of  unnecessary  litiga- 
tion, rules  for,  Kep't  of 
the  Joint  Committee  of 
the  Chamber  of  Commerce 
of  N.  Y.  S.  and  of  the 
N.  Y.  S.  Bar  Association 
on,  10-11  280,  283-238 
See  also  Courts  encourage  ar- 
bitration ;  Unnecessary 
litigation. 


338 


INDEX 


Prevention  of  unnecessary  litiga- 
tion, after  the  facts  have 
become  fixed,  284-287 

after  suit,  287-288 

approved  by  Bench  and  Bar 
alike,  260-262 

at  the  source,  284 

committee  on,  10 

differences,  minimizing  and  ad- 
justing of,  285 

favored  by  court,  11-18 

purpose  and  scope  of,  283 
Promise  implied,  validity  of,  66- 

67,  109,  142-144,  205 
Public    policy,    doctrine    of,    244 

favors  arbitration,  24,  25,  177, 
213 

favors  liberty  of  parties  to 
work  out  their  own  salva- 
tion, 14-15,  205 

foundation  for  decisions,  41-50 

foundation  of  the  law,  41 

opposed  to  arbitration,  240 

opposed  to  penalties  fixed  in  an 
agreement,  149 

requirements  of,  17 

Ransom,  Judge,  1 

Reason,  the  necessary  basis  for 

decisions,  50 
Reports,    inaccuracy    of,     85-86, 
114,  118-127 
See  also  English  common  law 
reports. 
Revocability,  doctrine  of. 

See  also  Arbitrators,  authority 

and  decisions  of. 
development    of,    in    American 
courts,    196,    327-241,   243, 
247-249 
hindrance    to    arbitration,    51, 
281 


Revocability,  doctrine  of,  list  of 
English  eases  on,  228 
under  the  English  law  of  ar- 
bitration, 58-59 
upheld  by  stare  decisis,  52 
Revocability   of   agreements,   92- 
98,   103-116,   157-158,   167, 
184,  190-197,  201-202,  206, 
222 
See  also  Action  upon  revoked 
covenant ;  Agreements 

must  be  enforced, 
prohibited  by  statute,   267 
to  submit  without  further  hin- 
drance   to     the     contract, 
236 
upon  charge  of  fraud,  218 
of    an    arbitrator,    power    not 
coupled  with   an   interest, 
180 
Revocation     of     an     arbitration 
must  be  sanctioned  by  the 
court,  180 
Romer,  Lord,  274,  278 
Root,  Elihu,  2 

Rosenbaum,  Samuel  G.,  8,  19-22, 
245,  253 

Scotland,  law  on  arbitration,  58, 
75,  208-210 

Scott,  Sir  John.  See  Eldon, 
Lord. 

Seldon,  Judge,  240 

Sewell,  Judge,  44 

Sharshull,  J.,  68 

Southmayd,  Charles  F.,  51, 
232 

Specific  performance.  See  Judi- 
cial error;  Courts,  power 
of. 

Speedy  justice  desired  by  mer- 
cantile men,  2-4,  7,  78 


INDEX 


339 


Stare  decisis,  attitude  of  Bar  to- 
ward, 39-51 

exceptions  to  the  rule  of,  47 
Story,  Judge,  250-252 
Submissions  by  deed,  recognition 
of  the  validity  of,  61-67, 
107-113 

See  also  Arbitration. 

by  obligation  as  compared  to 
submission  without  obliga- 
tion, 94 

Chamber  of  Commerce  N.  Y. 
S.,  Rules  and  regulations 
governing,  288-294 

forms  of,  291-294 

parol  or  by  deed  may  be  re- 
voked, 157 

upon  agreed  statement  of  facts, 
rules     for     litigation    of, 
285-286 
Sugden,    Lord    Chancellor,    157, 
169,  171,  205,  233 

Taney,  Chief  Justice,  43 
Tenterden,  Lord,  40 
Thurlow,  Chancellor,  95 
Tracy,  Judge  Benjamin  F.,  48 
Trade  organizations  in  Chicago 
agreeing  to  promote  tr9'de 


arbitration,    list    of,   303- 
306 
Turley,  Judge,  57 

United  States  Shipping  Board 
charter,  arbitration  provi- 
sion of,  bare  boat  form, 
301 

Unnecessary  litigation  defined, 
284 

Validity  of  covenants  under  early 

English  law,  67 
Veeder,  121,  137-140 
Vinogradoff,  Prof.,  86 
Yynior's  case,  authority  on  "Au- 
thority," 128-129 
authority      for      revocability, 

54 
basis   of   many   judgments   in 
England       and       United 
States,  84 
influence    of    the    dictum    of, 
157,  191,  206,  220 

Watson,  Lord,  208-209,  263,  269 
Werner,  Peroy,  10 

Ytlverton,  116-112 


(2) 


University  of  California 

SOUTHERN  REGIONAL  LIBRARY  FACILITY 

305  De  Neve  Drive  -  Parking  Lot  17  •  Box  951388 

LOS  ANGELES,  CALIFORNIA  90095-1388 

Return  this  material  to  the  library  from  which  it  was  borrowed. 


UCLAYRLJ 

DUE:  OCT  2  3  2005 

UCLA  ACCESS  SE 
Interlibrary  Loan 
1 1630  University  R 
Box  951575 
..OS  Angeles,  CA  CC 


NOV. 


-2005 


DC  SnilTHFRN  RFGinNA!   I  IRRARV  rArii  iTY 


11  ill  ill    llili  li    III    II    IJ  |l|l  II  I  III  III  I 

AA    001  006  388    i 


m 


111 


ij  ii Hi  ii  i  i    i  i  (  ! 

ipiii  IF" 

J'iliii       ill 
i{    I    !  Hi  iplllill 

!  »!  i;  is-i  1 


